Home headwinds easing somewhat

Target continues to face an uphill battle in its efforts to sell merchandise in categories with exposure to the housing industry, and recent data suggest challenging circumstances will remain intact.

However, according to data from the U.S. Commerce Department, construction of new homes and apartments declined more than 15% in December to 550,000 units, which according to an Associated Press report, was the worst year for home builders since 1959. While that data initially was viewed as negative, additional data out this week from the National Association of Realtors showed that existing home sales in December increased at a stronger-than-expected rate of 6.5%, and the median sale price dropped more than 15% to $175,400 from $207,000.

A pullback in construction, declining prices and an uptick in sales is a welcome combination, and an indicator that a degree of normalcy is returning to the housing market. With fewer new units coming on line and existing supply being absorbed more rapidly, there is a glimmer of hope for improving sales opportunities in home categories.