The housing market continues to sparkle and has been an anchor for the U.S. economy since May when the country started to reopen for business. The NAHB Housing Market Index rose to a record high of 90 in November and above the 85 expected. The three major components of the report, current sales conditions, the component measuring sales expectations and the measure charting traffic of prospective buyers increased. NAHB Chief Economist Robert Dietz said, “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front.
The New York Fed reports that total household debt rose by $87 billion to $14.35 trillion in Q3 2020. Mortgage balances, the largest component of household debt, were up by $85 billion in Q3 for a total of $9.86 trillion on September 30. Mortgage originations, which include refinances, were at $1.05 trillion, the second highest volume in the history of the series and second only to the historic refinance boom in Q3 2003.
The consumer continues to spend their hard-earned dollars on goods and services despite several state lockdowns or new lockdown measures. Retail Sales rose 0.3% in October versus the 0.5% expected and down from the robust gain of 1.6% in September. After the country began to reopen in May, Retail Sales blasted off as consumers rushed out to spend. But now, the data is fading back to more normal levels. To put it into perspective, October 2019 Retail Sales also saw a 0.3% gain and that was in a strong strong economy.