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US Housing Data Steps into the Spotlight

H.S. Borji
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US Housing Data Steps into the Spotlight

Today’s disappointing reading of the Housing Market Index has shifted the spotlight back to the US housing sector.

The Commerce Department on Wednesday will report on housing starts and building permits, giving investors a glimpse at the housing recovery at the end of the first quarter. Tomorrow’s reading could show housing starts increased 63,000 to 973,000 and building permits declined 6,000 to 1.008 million, according to estimates.

Groundbreaking in February slipped 0.2 percent, following a revised drop of 11.2 percent in January, the Commerce Department reported last month. Meanwhile, building permits surged 7.7 percent, offering hope the US housing market was gradually recovering from the weather-induced slumber.

It’ll take more than warmer weather to re-heat the housing sector, which has struggled with supply constraints and stricter lending terms. Home sales have been under pressure since last summer, when rising mortgage rates starting keeping would-be buyers out of the market. However, market participants are confident the housing recovery will gather pace in 2014, building off a solid 2013 that saw groundbreaking rise 19 percent. According to the National Association of Home Builders, housing starts will jump to 1.15 million in 2014 and continue to improve in 2015.

Last month’s unexpected surge in building permits offers hope home sales will return to form this spring. Building permits offer foresight into future housing projects and supply levels.

Wednesday also sees the release of weekly mortgage applications, courtesy of the Mortgage Bankers Association. Applications fell 1.6 percent in the first week of April.

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