Wednesday: NY Fed Mfg Survey, PPI, Beige Book
Several people asked me about this Financial Times article today: Fannie Mae warns of fall in US house prices
[Doug Duncan, chief economist at Fannie Mae] said that retreating institutional buyers could eventually contribute to a drop in house prices in certain US markets, if they begin selling off their property portfolios at the same time that housing builders begin to ramp up their activity.All Duncan is saying is that some markets might see price declines if investors start selling (I don't think investors will try to sell that many houses soon, so I'm not concerned).
“The investors have provided a very valuable service in helping transition these properties,” Mr Duncan said. “Will they find that their returns are maximised and it’s time to exit at the same time that the builders hit their stride?”
Yesterday Duncan came out with an upbeat forecast for 2014: Housing's Contribution to GDP Expected to Improve from 2013
“The continued housing recovery also is expected to contribute to GDP, doubling from 0.3 percentage points in 2013 to 0.6 percentage points in 2014, due in large part to new homebuilding activity,” said Duncan. “Despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, all of which bodes well for continued but measured housing recovery in 2014. Overall, although we don’t expect growth to break the 3 percent barrier this year, we believe the economy is on a sustainable path for continued growth with upside potential.”That is close to my view for 2014 (I'm a little more optimistic).
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
• At 8:30 AM, the NY Fed Empire Manufacturing Survey for January. The consensus is for a reading of 3.3, up from 1.0 in December (above zero is expansion).
• Also at 8:30 AM, the Producer Price Index for December. The consensus is for a 0.4% increase in producer prices (and 0.1% increase in core PPI).
• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.