US February Housing Data – A Preview

Coming up this week, we have a series of data releases relating to the US housing situation. However, these might be a bit overshadowed considering the all-important NFP release coming up at the end of the week.

We’ve discussed previously how housing data influences the currency markets. And of course, it’s a matter of latent concern following the subprime crisis. At the end of the year, we had data points giving some warning signs, so given the raft of important housing data coming up, has anything changed?

What are analysts looking at when it comes to the US housing market?

Schedule and Expectations

We get the first peek at housing data on Tuesday, at 16:00 CET (or 10:00 EST) with the New Home Sales data.

This has been delayed data due to the partial government shutdown. While an important bit of data for the market, it’s not expected to have much immediate effect.

New home deliveries surprised on the upside the last time they were published (for November). Currently, projections are for further good data in December despite the broader downturn in the markets at the time. New home sales are expected to fall month over month by just 2.2% to 609K homes.

Then we jump to Friday, when we will be getting the bulk of the housing data at the same time as the NFP: 14:30 CET (or 08:30 EST). The jobs report is going to overshadow the housing data release, but that doesn’t mean that its potential effect on the market should be ignored.

In fact, it could temper or exaggerate the response to the report and inject further volatility. This set of data has also been a casualty of the shutdown and corresponds to January Housing starts and building permits.

Expectations are for building permits to have remained largely stable at 1.323M compared to 1.326M in the prior month. Housing starts are expected to increase to 1.27M from 1.08M.

US Housing Situation

Housing is intimately related to the Fed and interest rate policy because well over 70% of homes are bought with debt. Existing homes are also refinanced with debt. Therefore mortgage rates are seen as a predictor of where the market really thinks rates are going. This, in turn, affects the affordability of homes for people and buying patterns across America.

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