Monday, 20 February 2012 19:25
QUOTE OF THE WEEK..."Strive for continuous improvement, instead of perfection." --Kim Collins, track and field star INFO THAT HITS US WHERE WE LIVE... U.S. homebuilding is certainly following the advice of the first World Champion sprinter from Saint Kitts and Nevis. With housing starts registering a 699,000 annual rate in January, we're still a good way from perfection, but continuous improvement is being demonstrated. Also improved were December's starts, upwardly revised to 689,000. Best of all, the three-month moving average improved to a 697,000 annual rate, a three-year high. And single-family starts are up 16.2% versus a year ago.
New building permits were also up in January 0.7%, to a 676,000 annual rate. Versus a year ago, they're up 55% for multi-family and up 6.2% for single family homes. Even better, the number of single-family homes under construction was up 2.1% in January, the largest gain since 2004.And there were 119,000 more single-family starts than completions in January, the widest gap in those numbers since the housing boom peak in 2006. Builders clearly are more optimistic. BUSINESS TIP OF THE WEEK...It's important to stay optimistic. Every problem has a solution and you'll usually find it more quickly by having a positive attitude from the start.
UP...The stock market went in the right direction, enjoying its sixth advance in seven weeks with the S&P 500 at a new nine-month high. It wasn't clear why investors felt so good, as economic signals continued mixed. The Greek parliament approved austerity measures, but the situation is not yet resolved and there are other spendthrift Eurozone countries waiting in the wings. Good news over here included the above Housing Starts, plus weekly initial jobless claims dropping to 348,000. Although declining, this number is still not where it needs to be.
Then there's inflation. Core CPI put consumer prices up a greater than expected .02% for January and up 2.3% year-over-year, their biggest gain since 2008. Leading Economic Indicators (LEI) were up a fourth straight month, but lower than expected. Manufacturing showed surprising strength in the Philadelphia and New York regions, yet overall industrial production came in flat. Retail sales were up in January following a flat December, but car sales were stalled.
For the week, theDow ended up 1.2%, at 12950; the S&P 500 closed UP 1.4%,at 1361; and the Nasdaq shot up 1.6%, to 2952.
There were small pull backs in bond prices as investors pulled out, hoping the Greek debt crisis would get resolved this weekend. The FNMA 3.5% bond we watch ended the week down only .06, to $103.10. The national average rate on a 30-year fixed rate mortgage stayed at its record low level in Freddie Mac's weekly survey. Average rates overall remain historically low.
DID YOU KNOW?...The top reasons people are selling their homes is for job relocation, tied with a need for more space, according to the latest seller profile from the National Association of Realtors.
HOME SALES, JOBS, CONSUMER MINDSET... It's a quiet week for economic reports but two big ones will depict the state of the housing market in January. Wednesday's Existing Home Sales are expected up just a bit, and Friday's New Home Salesare also forecast to rise, though still far below where they should be. We'll monitor weekly Initial Jobless Claims and Continuing Claims on Thursday, and Friday brings the final read on University of Michigan Consumer Sentiment for February.
The markets will be closed Monday in observance of Presidents' Day