{"id":288,"date":"2014-08-18T17:55:27","date_gmt":"2014-08-18T21:55:27","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=288"},"modified":"2014-08-18T17:55:27","modified_gmt":"2014-08-18T21:55:27","slug":"august-national-association-of-home-builders-index","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=288","title":{"rendered":"August National Association of Home Builders Index"},"content":{"rendered":"

KEY DATA:<\/strong> Housing Market Index: 55 (up 2 points)<\/p>\n

IN A NUTSHELL:<\/strong>\u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153Builders may not be irrationally exuberant but the rise in confidence is an indication that the housing market is getting better.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong>\u00c2\u00a0The housing market has been adding to growth but the recent data have not created any great feeling that the sector will lead the way toward much stronger economic activity.\u00c2\u00a0 That still seems to be the case but at least it now appears that residential construction should continue adding to growth.\u00c2\u00a0 The National Association of Home Builders\/Wells Fargo Home Builders Index rose in August, making it three consecutive months that builders’ optimism increased solidly.<\/em><\/strong>\u00c2\u00a0 The level is not yet back to where it was last August, when it hit a nearly eight year high, but it is getting close.\u00c2\u00a0 The three components, current sales, future sales and traffic, were all up.\u00c2\u00a0 Only the traffic measure remains at a low level<\/em><\/strong>, which is clearly a concern.\u00c2\u00a0 Apparently, the limited traffic is turning into sales, though.\u00c2\u00a0 Regionally, optimism was mixed.\u00c2\u00a0 Gains were posted in the Northeast and especially the Midwest, but were down somewhat in the South and West.<\/em><\/strong>\u00c2\u00a0 The weakest link remains the Northeast,<\/em><\/strong> where builder confidence may be rising but it still is in the \u00e2\u20ac\u0153not very good\u00e2\u20ac\u009d range.<\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> \u00c2\u00a0The housing sector has been sending mixed messages since the winter weather cratered activity.<\/em><\/strong>\u00c2\u00a0 Sales have been improving in fits and starts while construction has wandered aimlessly.\u00c2\u00a0 The trend may be up, but not with any vigor.\u00c2\u00a0 <\/em><\/strong>The Home Builders seem to be saying that activity could start picking up again.\u00c2\u00a0 Of course, that is only one voice.\u00c2\u00a0\u00c2\u00a0 Fannie Mae\u00e2\u20ac\u2122s economists toned-down their view of the housing market for the second half of the year<\/em><\/strong>, indicating that “With respect to housing\u00e2\u20ac\u2122s contribution to growth this year, we have downgraded our outlook following the disappointing housing activity seen during the first half of the year<\/em>“.\u00c2\u00a0\u00c2\u00a0 I guess the simplest thing to say is that housing will add to growth but not be the driving force behind any major upturn in economic activity. <\/em><\/strong>\u00c2\u00a0Anything that implies less than stellar growth helps those at the Fed who want to watch and wait, and that includes the Fed Chair.\u00c2\u00a0 As for the markets, the Home Builders and Fannie Mae reports will probably just add to the view that rates are not going up anytime soon.\u00c2\u00a0 Of course, there are geopolitical concerns that seem to ebb and flow, as well as Chair Yellen\u00e2\u20ac\u2122s talk on Friday in Jackson Hole.\u00c2\u00a0 Past Fed Chairs have used this forum to send messages about the future direction of policy. \u00c2\u00a0It is fervently hoped that we will get some idea about Yellen\u00e2\u20ac\u2122s thinking on how a tightening in the labor market translates into inflation issues and the need to raise rates.\u00c2\u00a0 Wage pressures only matter to the extent they create inflation concerns and we have no idea about the speed of that transmission process and what that may mean for Fed policy.\u00c2\u00a0 In other words, the era of \u00e2\u20ac\u0153better communication\u00e2\u20ac\u009d continues with very little good communication.<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Housing Market Index: 55 (up 2 points) IN A NUTSHELL:\u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153Builders may not be irrationally exuberant but the rise in confidence is an indication that the housing market is getting better.\u00e2\u20ac\u009d WHAT IT MEANS:\u00c2\u00a0The housing market has been adding to growth but the recent data have not created any great feeling that the sector … Continue reading August National Association of Home Builders Index<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,37],"tags":[],"class_list":["post-288","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-national-association-of-home-builders-index"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=288"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/288\/revisions"}],"predecessor-version":[{"id":289,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/288\/revisions\/289"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}