While on
Thursday we can look forward to the ECB monetary policy statement and press
conference, which should give us more to think about in terms of possible additional
Eurozone easing, the rest of the week is dominated by housing stats from
various jurisdictions. Yesterday saw the UK Rightmove House Price Index, which
showed a slowing growth in house prices both year-on-year and month-on-month.
In the US, the National Association of House Builders Housing Market Index indicated
some growth, up from 62.00 previous and expected to 64.00 yesterday.
Later today
sees Housing Starts and Building Permits in the US, which can move the Forex market,
while tomorrow MBA Mortgage Applications figures will provide a leading
indicator of the health of housing stateside. Then, on Thursday, just when we
will be absorbing the thoughts of Mr. Draghi, the US Housing Price Index will
be released, as well as Existing Home Sales.
Housing can be a confusing economic
indicator
It is a
truism to say that there is no such thing as an homogenous national housing
market. Each city and geographical area constitutes a separate marketplace. Therefore
we can see dramatic price increases in favoured urban areas, while in the same country
regional variations can give a completely different impression.
The ease
with which investors can obtain loan finance can also distort the picture. This
aspect has come to the fore in Australia with the recent rise by Westpac in its
variable mortgage rate, which is expected to assist the monetary authorities in
their desire to reduce core interest rates. These rates have tended to remain
high in spite of good economic reasons for their reduction by a fear of
exacerbating a housing bubble, particularly in cities.
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