WASHINGTON (3/19/14)--While February's Census Bureau numbers may indicate a sluggish housing market, a recent surge in home-construction permits may be foreshadowing a steamy summer season for homebuilders instead (Economy.com March 18).
Housing starts, or the number of homes to begin construction, fell 0.2% in February to 907,000 after January's numbers had been revised a bit higher than previously reported. Compared with February 2013 data, starts have taken a 6.4% dive.
Harsh weather, which largely shut in builders and prevented many new projects from getting off the ground, likely fueled the decline (MarketWatch March 18).
The road ahead may be clearer. Permits for home construction, thanks to multi-family or apartment construction permits, jumped by 7.7% to 1.018 million, which sits 6.9% higher than last year's numbers.
Specifically, multi-family dwelling construction permits leapt 24.3% in February, while permits for single-family homes sank by 1.8%.
A positive trend in home completions also has been bearing out of late, as completion of privately owned housing units neared a post-recession high this month with 886,000 annualized, representing a 4.4% improvement from January and a 21.9% upswing from the prior year.
WASHINGTON (3/19/14 UPDATED: 2:25 p.m. ET)--The Federal Open Market Committee will take "a balanced approach" and update its forward guidance as it looks toward keeping the interest rate at 0% to 0.25%, it announced after today's meeting.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run," the Fed said in its post-meeting statement.
The FOMC will assess progress--"both realized and expected"--toward its twin objectives of maximum employment and 2% inflation. The assessment information will include "measures of labor market conditions, indicators of inflation pressures and inflation expectations and readings on financial developments," the Fed noted.
Based on these factors, the committee continues to anticipate that the current target range for Fed funds will continue after its asset-purchase program ends.
The Fed also is continuing to draw down its monthly asset-purchasing program that it announced in December.
Beginning in April, the committee will add just $25 billion per month to its holdings of agency mortgage-backed securities instead of $30 billion per month. Longer-term Treasury securities will drop to $30 billion per month down from $35 billion per month.
By comparison, in February, the Fed added $30 billion per month rather than $35 billion per month in mortgage-backed securities to its holdings. Longer-term Treasury securities were reduced to $35 billion per month from $40 billion per month.
This is the third straight meeting with a $10 billion reduction.
Underlying conditions--mixed jobs reports, consumer spending and inflation--have been skewed by severe winter weather that has challenged economic forecasts.
The meeting is the first for Janet Yellen as chair of the policymaking group.