The NAHB (National Association of Home Builders) housing diffusion index came in at 29 for February, better than the estimated 26 and also much higher than the 25 reading in January. It is also up for five straight months and now at the best level since May 2007. However, the headline is still below the long run historical average of 49 so there is a long row to hoe before real estate conditions normalize...
Despite the NAHB improvement, the level is still quite depressed. And all one needs to do is read yesterday’s FOMC minutes to realize how concerned policymakers are over the fragility of the real estate sector. Fragile is the operative word here. Of course, Masco’s larger-than-expected Q4 loss was also a shot across the bow, seeing as how connected the firm is with the homebuilding industry.
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