"The housing market index rose 2 points in February to a higher-than-expected but still very depressed level of 17. The consensus forecast was looking for a dip to 14."I guess an uptick is better than a down tick, but from where we are right now, there's really nowhere left to go. The report mentions that single family home sales were up slightly and that builders seem more optimistic about improving market conditions. I guess this is some good news, the rest of the broader economic outlook is improving as well. Consumer sentiment has developed a slight upward trend, the manufacturing sector is still churning along nicely, we've seen increased activity in retail and what looks like a bottom (from a data standpoint) in the unemployment numbers.
At this particular juncture its difficult to make an argument against, at least some short term economic recovery. We're still yet to see how markets will be affected when stimulus spending slows down and the Fed stops purchasing agency debt and mortgage backed securities. Some estimates out there today estimate treasuries jumping anywhere from 100 to 200 basis points. I don't know if I see an increase of quite that magnitude in the future, but there will be an increase no doubt. Higher rates will clamp down on what little recovery we've had in housing and put more pressure on the financial system. This, in combination with stimulus measures for new home tax credits halting in April will have a further adverse affect on housing. I've said this hundreds of times, but I'm still looking for jobs, and they don't really seem to be out there. Most estimates still assume an unemployment rate of near 10% through 2010 with improvements coming in the latter half of the year. This recovery will likely be a slow one, and hopefully the economy can stand on its own without fiscal and monetary government assistance.
That's all for now, I'm going to grab some breakfast.
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