The housing market ended 2019 on a hot note. Builders, more optimistic than they have been in 20 years, broke the most ground since 2006 and sales of previously owned homes were the strongest in about two years. Housing stocks, including
are at or near historic highs.
It makes sense, given low interest rates and low unemployment. But shrinking supply and rising prices seem all but certain to eventually catch up to the housing sector as the prospect of buying a home wanes for some people—especially first-timers.
Investors will get a better sense this week of just how the housing market is shaping up when the National Association of Realtors releases its January numbers. “Spectacular, but clearly unsustainable” is how Ian Shepherdson of Pantheon Macroeconomics describes the December boom in housing starts.
Economists surveyed by Bloomberg expect building to have cooled since then, reversing some, but not all, of the December increase. Sales of existing homes, meanwhile, probably slipped as well.
One key to watch within the existing-home sales report is supply. Housing inventory at the end of 2019 fell 15% from November’s level and 8.5% from the total a year earlier, while unsold inventory dropped for a seventh straight month, to a record low. Shrinking supply boosted the median home price 7.8%, year over year, and prices rose in every region of the U.S. Affordability and its impact on demand has, not surprisingly, been an ongoing topic on builders’ earnings calls.
U.S. stock and bond markets are closed for Washington’s Birthday.
reports quarterly results.
Advance Auto Parts
Vornado Realty Trust,
and Wabtec report earnings.
The National Association of Home Builders reports its NAHB/
Housing Market Index for February. Consensus estimates are for a 75 reading, matching the January figure. This indicates that home builders are bullish on the housing market in the near term.
The Federal Reserve Bank of New York releases its Empire State Manufacturing Survey for February. Economists forecast a six reading, similar to the past seven months, suggesting sluggish growth for the region’s manufacturing sector.
The BLS releases the producer price index for January. Consensus estimates are for a 0.2% rise, after a 0.1% gain in December. The core PPI is also expected to climb 0.2%.
Pioneer Natural Resources
, and Synopsys report quarterly results.
The Federal Open Market Committee releases minutes from its late-January monetary-policy meeting.
The Census Bureau reports residential construction data for January. Expectations are for a seasonally adjusted annual rate of 1.42 million building permits, matching the December data. Housing starts are seen falling 13%, to an annualized 1.4 million.
American Electric Power
Cabot Oil & Gas
Norwegian Cruise Line Holdings
, and ViacomCBS report earnings.
The Conference Board releases its Leading Economic Index for January. Consensus estimates are for a 0.2% rise, after a 0.3% decline in December.
Royal Bank of Canada
report quarterly results.
hold investor meetings in New York, ahead of the 2020 American International Toy Fair.
releases its U.S. Manufacturing Purchasing Managers’ Index for February. Expectations are for a 52 reading, even with the January data.
The National Association of Realtors reports existing-home sales for January. Economists forecast a 2% decline to a seasonally adjusted annual rate of 5.43 million homes sold. In December, the median home price was $274,500, a 7.8% year-over-year increase.
Write to Lisa Beilfuss at email@example.com