The US housing market and the US consumer have been moving in opposite directions of late. Reuters reports that home loan applications fell last week.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ended December 23 decreased 6.8 percent to 554.1 from the previous week's 594.6. Volume was at its lowest level since the week ended May 24, 2002, when the index hit 516.9.
The group's seasonally adjusted index of refinancing applications dropped 11.2 percent to 1,259.1, compared with 1,418.1 the previous week. Volume was at its lowest level since the week ended April 12, 2002, when the index touched 1,246.1...
MBA's seasonally adjusted purchase mortgage index fell 4.5 percent to 432.9 from the previous week's 453.1, its lowest level since February. The index is considered a timely gauge of U.S. home sales.
But Reuters also reports that consumer confidence is picking up.
The Conference Board, a private research group, said on Wednesday its index of consumer confidence climbed to 103.6 in December from 98.3 in November... The confidence data also indicated Americans were feeling more upbeat about the future, with the survey's expectations component rising to 91.6 from 88.4.
Redbook Research said its data, which is based on estimates from retailers, showed sales increased 3.7 percent in December compared with the same month last year, although they were flat from November... A separate report from the International Council of Shopping Centers (ICSC) and UBS Securities LLC showed sales rising 2.8 percent last week, following a 2.4 percent gain a week earlier...
A better labor market also appeared to be making people more comfortable with the economic situation. The Conference Board said the percentage of Americans saying jobs were hard to get falling to 22.2 from 23.6.
Recent retail sales were also good in Europe, Bloomberg reports.
European retailers' sales rose during the Christmas period as consumers in Germany and the U.K. become more confident about the economy and took advantage of an extra day of shopping to buy products such as MP3 players and perfume.
John Lewis Partnership Plc, a closely held U.K. department- store operator, said today that sales in the 28 days ended Dec. 24 rose 12 percent from the same period last year. Ludwig Beck AG, a German retailer, said revenue in the month of December leading up to Christmas increased 4.8 percent, exceeding the company's expectations, as shoppers opted for more-expensive products...
GfK, a market-research company, said today that German consumer confidence rose to a six-month high in December... Germans spent about the same on presents for this year's holiday season as last year, the country's HDE retail association said yesterday...
The number of people in U.K. stores in the week through Christmas rose 16 percent from last year, retail consultant SPSL said today... The number of people in stores in the U.K. on Dec. 26 and 27 was 8 percent higher than last year as shoppers sought out post-holiday bargains, FootFall, a consultant, said today in a statement.
With people in buying mood, no wonder UK house prices rose in December.
House prices rose for the first time in 18 months in December, according to property consultant Hometrack's latest survey published on Wednesday.
It said that prices rose by 0.1 percent in December, bringing the average cost of a home to 160,900 pounds. Prices were 1.59 percent lower than a year earlier.
Of course, houses are not the only assets being bought up. European companies have been busy issuing shares to raise cash over the past year amid strong stock markets, reports Reuters.
European companies raised $213 billion (122 billion pounds) in equity and equity linked markets this year, the highest tally since the technology boom of 2000, with bankers and investors cautiously hopeful of similar levels next year.
There have been lots of liquidity worldwide to fuel spending, but the US mortgage application data, coupled with the recent yield curve inversion in the US, could be a harbinger of things to come.
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