QUOTE OF THE WEEK… “Sometimes we stare so long at a door that is closing that we seek too late the one that is open.”–Alexander Graham Bell, American inventor
INFO THAT HITS US WHERE WE LIVE… There is more and more evidence that the door of opportunity is opening in the housing market. On Valentine’s Day Freddie Mac showed us some love in their Housing Market Outlook, which projected starts UP 22% this year, to a 950,000 unit annual rate. Their chief economist commented, “Across the nation, most local housing markets have room for sustainable growth…. As the broader economy heals, expect to see more good news, with house prices continuing their recent upward trend, and home sales and housing starts continuing to post strong growth rates.”
Not to be outdone, the National Association of Realtors (NAR) reported Monday that the recovery in real estate values is picking up steam. Median home sale prices were UP 10% in Q4 over last year and 133 of 152 metro areas posted yearly gains, versus just 29 metro areas a year ago. The NAR’s chief economist commented, “Home sales are on a sustained uptrend…fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising.”
BUSINESS TIP OF THE WEEK… With social networks, focus on building a manageable number of meaningful connections, instead of going for hundreds of weak connections. Seek quality, not quantity.
>> Review of Last Week
WALL STREET’S POKER FACE… It was hard to gauge the mood of investors last week. One stock index was up and two were down. The up one was the broadly-based S&P 500, now posting gains seven weeks in a row for the first time in over two years. But these up and down moves were so small, they revealed nothing about investors’ economic feelings. They may be simply bracing for a correction, which could be triggered by the sequestration — the automatic spending cuts now scheduled for March 1 if Washington can’t come up with a deal.
The economic reports should have made people feel better. Retail Sales, NY Empire Manufacturing, and Michigan Consumer Sentiment all came in meeting or beating expectations. The only one that missed was Industrial Production, down 0.1% in January, but November and December were revised upward considerably. Weekly jobless claims dropped to 341,000 and continuing claims dipped to 3.11 million.These figures have some economists expecting moderate growth in payrolls for February.
The week ended with the Dow down 0.1%, to 13982; the S&P 500 UP 0.1%, to 1520; and the Nasdaq down 0.1%, to 3192.
The positive economic data created selling pressure in the bond markets, pushing prices lower. The FNMA 3.5% bond we watch ended the week down .05, at $105.08. Freddie Mac’s Weekly Survey showed national average mortgage rates holding near historical lows, the 30-year fixed rate unchanged for the third week in a row. The Mortgage Bankers Association reported demand for purchase loans UP 15% from a year ago.