With several disappointing economic reports of late, the question remains whether our economy is moving in the right direction. The housing market is a prime example. After making important improvements last year, the housing sector has struggled of late.
January Housing Starts declined from December, marking two consecutive months of declines after November came in at the highest number since 2008. Building Permits, a sign of future construction, also fell in January from December, as did Existing Home Sales. The National Association of Realtors cites the disruptive and prolonged winter weather patterns, tight credit, limited inventory, higher prices and higher mortgage rates for the slip in Existing Home Sales.
In addition, the National Association of Home Builders (NAHB) Housing Market Index came in at 46, the lowest reading since last May. Readings over 50 indicate that more builders view conditions as good, rather than poor. NAHB said that weather conditions across the country led to a decline in buyer traffic last month.
There was some good news on the housing front. For example, despite the dip in Existing Home Sales, New Home Sales actually rose from December to January to come in well above expectations and the highest level since July 2008.
In addition, RealtyTrac reported that January marked 40 consecutive months in which U.S. foreclosure activity declined on an annual basis. Filings are down 18 percent from January 2013 to January 2014.
In the manufacturing sector, both the Empire State Manufacturing Index and the Philadelphia Fed Index fell in February, coming in well below expectations. However, the preliminary February U.S. Manufacturing Purchasing Managers Index rose to the highest level since May 2010.
There was a disappointing read on January’s Retail Sales report, which showed the second straight monthly decline. Much like the housing market, retailers cited the harsh January weather as the reason for the decline in retail sales.
Despite the recent market movements, now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you.