Overview: Over the past week, investors became more concerned about the pace of global economic growth, partly due to uncertainty about the impact of tariffs. It was a relatively light period for economic data, which was mostly focused on the housing sector, where severe weather depressed the results. Mortgage rates ended the week lower.
In the housing sector, January sales of existing homes, which account for roughly 85% of the total market, fell 5% from December. Despite the losses, though, sales still were a little higher than a year ago. The median existing-home price of $396,900 was up 5% from last year at this time, marking a record high for the month of January. Inventory levels remain highly depressed, standing at just a 3.3-month supply nationally, far below the 6-month supply that is typical in a balanced market. The trend is favorable, however, as inventories were 17% higher than a year ago.
The latest results were even poorer for the segment containing newly constructed homes. In January, new-home sales, which account for the remaining 15% of the market, dropped 11% from December. The median new-home price of $446,300 was up 4% from a year ago. While existing-home sales measure actual closings during the month, new-home sales are based on contracts signed, making them a leading indicator of future housing market activity.
Additional inventory is still badly needed in many regions, especially at the lower end of the price range, and the latest home building data was not encouraging. Overall housing starts in January dropped 10% from December, matching the consensus forecast, and were slightly lower than a year ago. Single-family starts fell 8% from December, while single-family building permits, a leading indicator of future construction, were roughly flat. A separate survey of home builder sentiment on housing market conditions from the National Association of Home Builders (NAHB) unexpectedly plunged sharply from 47 to 42, the lowest level in five months. Builders reported that concerns about tariffs, higher mortgage rates, and rising costs were headwinds to future construction.
The monthly report on consumer confidence published by the Conference Board caused investor concerns about slowing economic growth to increase. The most recent reading showed a steep decline from 105 to 98, far below the consensus forecast and the lowest level since June 2024. Pessimism about future job prospects and elevated consumer expectations for future inflation were two of the primary factors for the weakness this month.
Existing-Home Sales (millions)
Week Ahead
Feb. 28
Personal Income and Outlays
Personal Consumption Expenditures (PCE) Price Index
Mar. 3
Institute for Supply Management (ISM) Manufacturing Index
Mar. 5
ISM Services Index
Mar. 7
Employment Report
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