Guest Post from:
Senior Loan Originator
Axia Home Loans
Housing Starts surged in June, increasing 9.8 percent to 1.174 million units. May’s figures were also revised higher. Building Permits, a sign of future construction, surged to a near eight-year high as well. It’s important to note that the increase in Housing Starts mostly came from the multifamily construction sector, which can be volatile. Ground breaking for single-family homes declined in every geographic region but the South.
Overall, construction trends have recovered following the harsh winter earlier this year. The recent National Association of Home Builders (NAHB) Housing Market Index reading of 60 confirms this, as builder confidence has reached its highest level since November 2005. Readings over 50 show that more builders view conditions as good rather than poor. NAHB Chairman Tom Woods noted, “As we head into the second half of 2015, we should expect a continued recovery of the housing market.”
However, other areas of our economy continue to struggle. Retail sales have been inconsistent from month to month. After disappointing figures in April, May’s numbers rebounded, boosting hope that the U.S. economy would gather some steam. However, June’s sales couldn’t continue that momentum, as they declined 0.3 percent. May’s figures were also revised downward.
With the saga in Greece nearly resolved, investors should begin to get back to the fundamentals of the U.S. economy: economic data, earnings season and the specter of rising interest rates. The Fed will be closely watching housing, retail sales and other key reports this summer, as they consider when to raise their benchmark Fed Funds Rate.
Despite the recent volatility in the markets, home loan rates remain attractive and near historic lows. If I can answer any questions at all for you, please get in touch!