Market Trends Weekly - Week of 8-25-14

Housing Recovery Back on Track

Key reports indicate that the housing recovery is back on track, while inflation remains tame. The recent stall in recovery may be coming to an end. Housing starts and Building Permits are on the rise. Tame consumer inflation means good news for Bonds. All in all, now is a great time to consider a home purchase or refinance!

Last Week In Review

"There is nothing as sweet as a comeback." Anne Lamott. That's certainly true when it comes to the housing sector, as recent reports indicate that the stall in the housing recovery seen late last year and in recent months may be over.

Housing Starts for July surged by nearly 16 percent to an annual rate of 1.093 million, above expectations and up from the 945,000 in June. Building Permits, a sign of future construction, also came in above expectations while Existing Home Sales for July increased by 2.4 percent from June.

In addition, the National Association of Home Builders Housing Market Index, which is a measure of builder confidence, rose two points to 55 in August from the 53 recorded in July. This was the third straight monthly gain and brings the index to its highest level since the 56 recorded in January. As a rule, 50 is the line between positive and negative sentiment. All in all, these reports are a good sign that the housing sector is coming back strong.

In other news, despite signs earlier this summer that inflation may be heating up, the latest reports show that inflation at the consumer level remains tame. This is good news for Bonds, as inflation reduces the value of fixed investments like Bonds. And since home loan rates are tied to Mortgage Bonds, tame inflation is typically good news for home loan rates as well.

The bottom line is that home loan rates remain near some of their best levels of the year and now is a great time to consider a home purchase or refinance.

Date

ET

Economic Report

For

Estimate

Prior

Impact

Mo. Aug 25

10:00

New Home Sales

Jul

NA 

406K

Moderate

 Tu. Aug 26

8:30

Durable Goods Orders

Jul 

NA 

1.7% 

 Moderate

 Tu. Aug 26

9:00

S&P/Case-Shiller Home Price Index

Jun

NA 

9.3%

Moderate 

 Tu. Aug 26

10:00

Consumer Confidence

Aug 

 NA

90.9

 Moderate

 Th. Aug 28

8:30

Jobless Claims (Initial)

8/23 

NA

 289K

Moderate 

Th. Aug 28

8:30

Gross Domestic Product (GDP)

Q2

NA

4.0%

 Moderate

 Th. Aug 28

8:30

GDP Chain Deflator

Q2

NA

-2.0%

 Moderate

Th. Aug 28

10:00 

Pending Home Sales

Jul

NA  

 -1.1%

 Moderate

 Fri. Aug 29

8:30

Personal IncomeJul

Jul

NA  

0.4% 

Moderate 

 Fri. Aug 29

8:30 

 Personal Spending

Jul 

 NA

 0.4%

 Moderate

 Fri. Aug 29

 8:30

 Personal Consumption Expenditures and
Core PCE

 Jul

 NA

 0.1%

 HIGH

 Fri. Aug 29

8:30 

 Personal Consumption Expenditures and Core PCE

 YOY

NA  

1.5% 

 HIGH

 Fri. Aug 29

 9:45

 Chicago PMI

 Aug

 NA

 52.6

 Moderate

 Fri. Aug 29

 10:00

 Consumer Sentiment Index (UoM)

 Aug

 NA

79.2 

 Moderate