The housing sector continues to be a bright spot in the U.S. economy fueled by low rates and an improving labor market. The NAHB Housing Market Index shot to a record high this month of 83, eclipsing the previous high of 78 set in August. The index dates back to 1985. However, the NAHB said that lumber prices have risen 170% since mid-April adding $16,000 to the price of a typical single-family home. The report went on to reveal that there has been a suburban shift that is keeping home builders busy.
The U.S. consumer continued to spend in August though down from the frothy readings in May and June. August Retail Sales rose 0.6% versus the 1.1% expected and just below 0.9% in July. This comes after the near 19% gain in May as the country began to reopen. Despite some media outlets throwing cold water on the report, suggesting the consumer is slowing down - this was a solid print. The 0.6% was quite a bit higher than the August 2019 Retail Sales reading which saw a gain of 0.4%, under a very different economic backdrop - a strong economy with ultra-low unemployment.
Mortgage rates held steady at record lows in the latest week and continue to a boon for the housing market. The MBA reports that the 30-year fixed-rate mortgage remained at 3.07% for the week ending September 11, 2020, with 0.36 in points. Within the report it showed that the Market Composite Index fell 2.5%, the Purchase Index slipped 0.5% while the Refinance Index declined by -3.7%.