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Weather Disrupts the Housing Numbers

Check out the latest from the respected Economists of the National Association of Home Builders.

The Weather Disrupts the Housing Numbers

As feared, the February housing numbers were not good. Given the unusually bad weather in the South and along the East Coast that month — with record setting snow storms in the Mid-Atlantic region and up into New England — the expectation was that many of the economic statistics would be bad, even on a seasonally adjusted basis, and they were.

House Price Stability?

House price measures have been sending off mixed signals recently. However, the consensus is that the worst is over, with small price vacillations up and down for some time to come.

At a minimum, housing prices have been falling at a much slower pace, and they have stabilized in many markets. As of January, the S&P/Case-Shiller seasonally adjusted 10-city and 20-city price indexes had both risen for eight consecutive months.

Minimal Pressure on Consumer Prices

Consumer prices as measured by the Consumer Price Index (CPI) remained tame in February, rising 2.1% on a year-over-year basis, down from 2.7% in December 2009. Core inflation — excluding food and energy — rose 1.3% on a year-over-year basis, down from 1.8% as recently as December 2009. This gives the Federal Reserve room to continue its current expansionary monetary policy to aid the economy in its recovery from the Great Recession.

Building material prices, which generally fell during much of the housing recession, are now showing signs of rising. Although price increases to date have been relatively modest overall, the cost of some materials has jumped considerably — including lumber, energy and copper.

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