Friday Economic Snapshot: Housing reports point to growth
This week saw another batch of mixed indicators of the nation’s overall economic health, but steady growth in the all-important housing market is a major reason for optimism.
One of the biggest factors in this sluggish recovery has been the housing market. It’s worth remembering that in every post-World War II recession, it’s been the housing market that has led us out of it. With the severely depressed housing market, it’s been difficult for this recovery to get much traction. Now that we’re finally back to housing being a positive contributor to GDP, we can expect more overall growth as well.
New home sales, mortgages and pending home sales
Long-term trends continue to point up for the housing market, even if some reports this week were spotty.
New home sales hit a 468,000 annual rate in January, the highest level since 2008. December sales were also revised upward from 414,000 to 427,000. January’s rate was a 2.2 percent from January 2013, which was last year’s top month for home sales on a seasonally adjusted annual rate.
Today’s Pending Home Sales index from the National Association of Realtors was basically flat, up 0.1 percent. Considering the weather in much of the country, that’s probably worth considering a victory.
On the mortgage front, Black Knight Financial Services reported this week in its First Look report that the number of loans in foreclosure in January was the lowest since November 2008 and that the delinquency rate was down by more than 10 percent since last January.
The always-volatile measures of consumer confidence presented a mixed picture once again.
The University of Michigan/Reuters Consumer Sentiment Index showed an 81.6 measure in February, up slightly from January’s 81.2. The Conference Board’s Consumer Confidence Index, on the other hand, came in at 78.1, a drop from January’s 79.4. On the positive side, the index did show that consumers feel more positive that they have about their current situation than they have since April 2008.
GDP revised down
Finally, the Bureau of Economic Analysis revised its estimate of Gross Domestic Product for the fourth quarter of 2013 from a 3.2 percent increase to a 2.4 percent increase.
That was based on lower-than-expected spending by consumers and state and local governments.