Market Minutes Ending For The Week Of March 18, 2016
Recent economic data showed signs of underlying inflation. Combined with strong housing and labor markets, this could contribute to higher mortgage rates.
However, the latest Fed commentary urged caution, sharing intent to raise policy rates but not until later this year. This could help near term to keep rates steady.
Another factor that could help keep rates low is recent retail sales. February's weak sales could signal weakness in the economic outlook, helping rates.
Housing starts hit a 5 month high in February as builders ramped up construction. Single-family housing projects surged 7.2% to the highest pace in over 8 years.
Building permits were down slightly from January to February, but still up 6.3% over the previous year. Permits for single-family homes rose 0.4% to 731,000.
Builder confidence in housing remains strong, noting a continued demand for new inventory. Builders are struggling with enough labor and land to meet the demand.
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