March Housing Starts fell 22.3%, their biggest monthly drop since 1984, as builders cut activities, uncertain about buyer demand, supply chains, and social distancing with work crews. Here’s more on COVID-19’s effect on the report.
Yet the year began so well, starts are still up versus a year ago! Nonetheless, the National Association of Home Builders confidence index fell from a very strong 72 to a weak 30 as a result of the coronavirus pandemic.
However, Freddie Mac’s chief economist noted: “daily economic activity metrics suggest the economy will likely not decline much further. Going forward, the key question is no longer the depth of the economic contraction, but the duration.”
REVIEW OF LAST WEEK
NEW HOPES SPIKE STOCKS… Stocks rallied on hopes some U.S. states and European countries could soon reopen their economies, as we got more evidence the COVID-19 case curve is flattening, particularly in the New York epicenter.
Germany, Austria, and Denmark are relaxing shutdown restrictions, while news here featured quicker tests, and a potential treatment and vaccine. Plus, the White House released new guidelines for states to reopen their economies.
Federal programs continue to help, though more money is already needed for the CARES Act Paycheck Protection Program (PPP). Economic data underscored the downturn’s depth, but investors traded on its possibly shorter duration.
The week ended with the Dow UP 2.2%, to 24,242; the S&P 500 UP 3.0%, to 2,875; and the Nasdaq UP 6.1%, to 8,650.
The stock market’s recovery hopes were not seen in the bond market. The UMBS 4.0% ended UP 0.03, to $106.64. The national average 30-year fixed mortgage rate continued to hover near historical lows in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… The current surge in refinances should help power the recovery. One observer noted that refis put “a lot more spendable money in the average American’s pocket and that will benefit us when the recovery occurs.”