he February housing market index fell from 75 to 74 in February which is still a very strong reading as the index is now 2 points off its expansion high. The housing market is quickly becoming one of the hottest areas of the economy. Home builders were helped by the warm weather in December and January, while buyers love the low mortgage rates.

As you can see from the chart below, the share of consumers saying now is a good time to buy a house rose to 72% which is the highest reading since October 2017. Those citing mortgage rates as a reason to be optimistic rose to 41% which is the highest reading since September 2016. The average 30 year fixed mortgage rate was 3.49% in the week of February 20th. The 30 year yield is only about 8 basis points above its record low which it set last year.

In the week of February 14th, the MBA composite applications index fell 6.4% weekly after it rose 1.1% in the week before. The purchase index fell 3% weekly after falling 6%. However, yearly growth was 10% as the housing market looks strong heading into the spring buying season. The refinance index fell 8% weekly after rising 5%. With the recent decline in rates refinancing has increased in the past few months. This is great for consumers because they lock in lower mortgage payments for the life of the loan.

Highest Permits Since March 2007

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