Good housing and economic news fell almost as thick and fast as snow on the East Coast this week. Hard to know where to start digging out.
Proceeding chronologically, the first up was another very good Labor Department report announcing the creation of 235,000 new jobs in February. Below the headline number was some especially good news for the housing industry; 58,000 of those jobs were in the construction sector. The January job creation number was upgraded by 11,000 to 238,000 and earnings ticked up another 0.2%.
Highest Since 2005
New home builders displayed the strongest confidence in their market since June 2005 in their responses to the National Association of Home Builders monthly survey. The index drawn from that survey surged by six points.
That confidence was reflected to a certain degree in the Census Bureau’s residential construction report for February. While permits were down by 6.2%, housing starts were up 3.0%. In addition, both numbers were higher than those in February 2016, by 4.4% and 6.5% respectively. Even better, single family numbers were strong, boding well for growing the dismal inventories. Single-family permits rose 3.1% from January and starts were up by 6.5%.
One Down, Two To Go
The Federal Reserve’s Open Market Committee did as expected at their meeting this month, raising the fed funds rate a quarter point to a range of 0.75% to 1.0%. What sent the markets dancing was the post-meeting announcement that they expect to do it two more times this year. Why was that happy news? Even though FOMC had more or less promised three rate hikes this year, the markets were sure they really meant four.
There will be a notable change in the way consumer credit reporting firms will keep score. Under some pressure from regulators, the three biggest, Equifax, Experian, and TransUnion, announced that starting July 1 they will remove all negative information about tax liens or court judgments from consumer records unless they contain at least three out of four specific pieces of identification–name, address, and either Social Security number or date of birth. New reports without this info will also be rejected.
FICO estimates that about 12 million credit scores will be affected–about 6% of the total. The impact will be small–probably less than a 20-point boost in each case.
With the “unwintery” weather enjoyed by most of the country–up until this week of course–the home sales reports, both new and existing homes–for February could give us a first look at the spring market. Hopefully they will provide the good news headlines next week.