Rising home prices signal strengthening economy, could lead to more purchase order financing demand

The U.S. economy has received many positive signs in the past couple months, including rising home prices. 

Should economic growth accelerate, wholesalers could begin to see additional business. To fill larger orders, these companies might need to rely on purchase order financing

Home prices increased more than expected in April, as the Standard and Poor's/Case-Shiller Home Price Indices showed gains in the 10- and 20-city composites. When compared to a year ago, the 10-city composite jumped 11.6 percent, while the 20-city composite was up 12.1 percent in the same period. 

"The 10- and 20-City Composites posted their highest monthly gains in the history of S&P/Case-Shiller Home Price Indices," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. "Thirteen cities posted monthly increases of over two percentage points, with San Francisco leading at 4.9 percent."

In the 12 month period ending in April, all 20 cities showed annual increases, with San Francisco leading the way at 23.9 percent, followed closely by Las Vegas, Phoenix and Atlanta. 

The housing recovery has been fueling economic growth for the past year, and Brian Jones, senior U.S. economist at Societe Generale, told Bloomberg housing is still doing "really well," and price gains are expected to continue for the next couple years. 

With the economy beginning to gain traction, business could pick up at wholesalers across the country. If this comes in the form of large orders, small companies will likely need to rely on financial assistance to fill them. 

One available option is purchase order financing, which allows a wholesaler to obtain up to 100 percent of the funds needed to fill an order without having to sell any equity in their company.