Depends on your client base. If they are mortgage interest rate-sensitive...
New York Times
Key Economic Measures Jumped in March
By VIKAS BAJAJPublished: April 26, 2006
Two key measures of housing and manufacturing activity jumped sharply in March, the Commerce Department reported today, indicating that the economy ended the first three months of the year with a roar.
A 13.8 percent increase in sales of new homes and a 6.1 percent jump in orders for durable goods signal that the economy, which had built up momentum in the first two months of the year, picked up even more speed last month. The reports indicate that, at least as of last month, the economy had shrugged off the burden of higher energy prices and interest rates, which many economists believe could significantly slow the economy later this year.
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Estimates on economic growth will play a critical role in shaping the actions of Federal Reserve policy makers, who have signaled that they will raise their benchmark short-term interest rates at least once more, to 5 percent from 4.75 percent, on May 10. The Fed has indicated further increases will be determined based on economic data.
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New home sales rose to an annual pace of 1.21 million in March, up from 1.07 million the month before and 1.2 million in January. Sales were strongest in the West, where they jumped 35.7 percent, and weakest in the Northeast, where they rose 4.7 percent.
But compared with last year the housing market has already weakened noticeably — sales were running at a pace of 1.31 million in March 2005 — and there are signs that sales and prices could lag further later this year. The median price — half the homes sold for more and half for less — slipped 2.2 percent from a year ago, to $224,200. And the number of homes on the market increased by 24.4 percent over the last 12 months, to 555,000; at the current sales pace it would take five and a half months to sell those properties.
The increase in inventories is the biggest in 33 years, and the drop in prices is the worst since January 2003, noted Ian Shepherdson, chief United States economist at High Frequency Economics. Sales "are going to drop in the next couple of months," he said, noting that mortgage applications, an early indicator for the housing market, were falling.
Mortgage applications fell 3.7 percent last week and were down 22.4 percent compared with the corresponding week a year earlier, the Mortgage Bankers Association of America reported today.
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