Housing Starts handily beat economists’ expectations this morning and CPI showed strength, too, sustaining the market momentum that has trended mortgage rates higher over the last 30 days.
The Federal Open Market Committee has repeatedly told us that it expects the economy to slow down in 2007, led by a weakening housing market. And yet, housing refuses to die. The unexpectedly high number of homes that broke ground and building permits that were issued in December is giving markets something to think about.
Is the worst of the housing slump over, or did unseasonably warm weather stoke the figures? Nobody seems to be sure just yet. After opening down on the day, mortgage markets have recovered to flat.