Market Recap: Solid Retail Sales, Surge in Housing Starts, and Rising Rates
Mortgage Rates are on the rise this week, but have leveled out a bit after sharp increases. According to the Mortgage Bankers Association, mortgage rates saw the biggest week over week increase since June 2013, and surpassed the highest level since January of this year.
Retail sales posted healthy gains up 0.8% from September to October. A strong job market and income growth have contributed to the increase in consumer spending. Automotive sales hit an 11-month high up 1.1%, and internet retailers jumped 1.5%. September’s increase was readjusted to 1% from 0.6% after a 0.2% decline in August was revised to show no change.
The home builders’ index did not change from October to November, and remains at a steady 63. Any score higher than 50 indicates a stable housing market, suggesting that builders view the conditions as good. Regionally, the Northeast, Midwest, and West each posted 2-point gains, and the South remained unchanged.
Housing starts are up 25.5%, reaching the highest level since 2007. Building permits are also up, 0.3% from September to October and up 4.6% on a year-over-year basis. The construction surge is driven by job growth and an increase in housing demand as more first time homebuyers are joining the market.
There were solid gains across the board this week in retail sales, housing starts and building permits. The home builders’ index showed no change, but any reading above 50 indicates a stable housing market. After rapid increases, mortgage rates are settling down.
Sources: MarketWatch, CNBC, Wall Street Journal, HousingWire, HousingWire