There was a little more housing activity than expected in November. Most of the housing data reported this week came in better than expected with 1.712 million building permits issued. This is higher than last month’s reading of 1.653 million and the expected 1.65 million.
Construction on 1.679 million houses begun in November. This is an increase from last month’s housing starts number of 1.502 million and also higher than what was expected.
Additionally, existing home sales were better than the previous month’s 6.34 million. November’s 6.46 million reflects an increase of 1.9% from October. The increase comes as more people seek to purchase homes in anticipation of increasing mortgage rates. Higher rents are also pushing buyers into the stability of a mortgage. The median price of an existing home is up 13.3% over the year to $353,900.
The increases in demand for housing come after a flat summer when high prices and limited supply slowed purchases. The increased demand is contributing again to price increases for construction supplies. Lumber is back up over $1,000 per thousand board foot.
The Leading Indicators Index was up 1.1% in November. The index tracks 10 economic indices seen as indicators of economic expansion. Initial estimates had it up 0.8%. In October, the index was up 0.9%.
Preliminary numbers for the Markit Purchasing Managers Index (PMI) Composite for December are still strong at 56.9 but a little weaker than November’s 57.2. The Manufacturing PMI is at 57.8, also a little weaker than its previous month’s reading of 58.3. The expectation was for the number to stay at 58.3. The same story was true with the Services PMI, at 57.5. Last month’s reading was at 58. The reports above 50 continue to be positive indicators for the economy.
We saw a jump in consumer confidence to 115.8 in December. This compares favorably with last month’s 111.9 and the expectation of a decline to 110.0. According to the report, inflation concerns declined after hitting a 13-year high last month. Consumer confidence is expected to continue facing head winds in 2022 as people navigate higher prices.
Final numbers for GDP were released this week. Quarter-over-quarter growth was restated by two basis points to 2.3%.
Source: BTC Capital Management, Bloomberg LP, Ibbotson Associates, FactSet, Refinitiv.
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