The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of
Retail Sales Dip Slightly
“Go on, take the money and run.” (Steve Miller Band) Consumers haven’t been running to the registers with their hard-earned money, as spending at U.S. retail stores fell for the third straight month.
The Commerce Department reported that February retail sales fell 0.1 percent, versus the gain of 0.3 percent expected. This is the first time since April 2012 that retail sales have declined three months in a row. The important question is whether this data signals an economic slowdown in the first quarter, as consumer spending makes up two-thirds of the U.S. economy and is crucial to a healthy economy.
Housing starts also declined in February, dropping 7 percent from January to an annual rate of 1.236 million units. This was below expectations, and down from the 1.329 million reported in January, the Commerce Department reported. The big drag on starts was a 28 percent plunge in multi-family units from January to February. Single-family starts, which account for the biggest share of the housing market, rose 2.9 percent from January. Total housing starts fell in the Northeast, South and West, but gains were seen in the Midwest. Building permits, a sign of future construction, fell 5.7 percent from January. For buyers struggling with limited inventory across much of the country, this report was disappointing after the strong gains in January.
Consumer inflation via the Consumer Price Index (CPI) remained tame in February, coming in at 0.2 percent, which was in line with estimates and down from the 0.5 percent recorded in January, the Labor Department reported. Lower energy prices were the catalysts for the lower reading. When stripping out volatile food and energy prices, the more closely watched Core CPI was also in line at 0.2 percent.
The Producer Price Index, which measures inflation at the wholesale level, showed wholesale inflation was also tame in February. Tame inflation typically benefits fixed investments like mortgage bonds, and the home loan rates tied to them.
At this time, home loan rates remain attractive and near historic lows.
This week, we’ll get a read on home sales and a sense of how the Fed feels the economy is doing.
If you or someone you know has questions about home loan products or rates, please contact me. I’m always happy to help.
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