The market was more volatile last week with the instability in the banking industry last week, but luckily the inflation and builder confidence data offered some reassuring news. Let’s start with the inflation data.
The Consumer Price Index (CPI) increased in February by 0.4% but the annual reading declined by the same amount, now sitting at 6%. While inflation has been on a downward trend, many are waiting for the moderated shelter costs to take effect. Over the past year, shelter has increased over 8% and accounts for about 60% of the total increased inflation reading (minus food and shelter). Now that we’re seeing shelter costs come down a bit, it should add some additional downward pressure to the inflation reading.
The Producer Price Index (PPI) decreased both at the monthly and annual levels. In February, it dropped 0.1% and annually it dropped by 0.9%, now sitting at 4.6%. Note that this is less than half its peak last March when PPI was 11.6%. Great news!
February also brought good news for the housing sector! Housing Starts, the measure of new construction starts, and Building Permits, which signal future supply, both increased! However, most of the gains last month were seen in multi-family units. While single-family homes also saw increases, both Starts and Permits are more than 30% lower than February 2022.
The tight supply is bitter-sweet. We know that the continued increase in home appreciation has been supported by the tight supply, but we’d prefer to see more opportunities for buyers. The Housing Market Index, which measures builder confidence, increased for the third consecutive month.
This week’s economic calendar will be dominated by the Fed’s two-day meeting, which wraps up this afternoon with the Monetary Policy Statement and press conference. We’ll also be taking a look at February’s New and Existing Home Sales. Stay tuned for next week’s breakdown!
New Construction VA Loan
We've been talking about our One-Time Close product for conventional borrowers but now, qualified VA borrowers can get a loan for up to $4M with NO PAYMENTS DURING THE BUILD PERIOD!
This is an unbelievable opportunity to save time and money. One closing! This means one interest rate (with the option to modify down if the market improves), one down payment, one full credit report to order, and one approval.
This classic made famous by the PierSide Grill is a recipe that all SWFL residents should know about.
Make it your own by adding jalapeno, sautéed onions, or even swapping out the blue cheese for gorgonzola!