By: Todd M. Schoenberger
After a heavy-loaded week with nearly two-dozen economic reports, FOMC minutes, SEC settlements and a roster of market influential quarterly earnings reports, investors and traders up and down Wall Street will be presented with a limited number of reports with increased emphasis on the beleaguered housing sector.
Starting with Monday’s National Homebuilders Association Index survey, everyone will be looking and hoping for improvements from an area that has been decimated over the past few years. However, the consensus from all of the upcoming reports on housing seems to show a downward trend; one that may cause additional concerns leading into the slow remainder of the summer.
“The week will focus on [the] housing market and the negative trend post tax credit expiration, which should continue to reveal a troubled market and keep Treasurys bid,” said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners in New York, to MarketWatch.
Tuesday brings two more reports on the sector: Building Permits and Housing Starts. Permits are expected to remain virtually flat on a month-over-month basis with an expectation for 575,000 versus 574,000 in May. Housing Starts are expected to dip to 570,000 compared to 593,000 in May.
The housing news will conclude on Friday when the all-important Existing Home Sales Data is released, and this figure could become the most troubling for the sector. The Wall Street consensus is calling for an annual rate of 5.04 million home sales versus a 5.66 million annual rate released in May.
Overall, sentiment and confidence have eroded at an alarming pace, primarily a result of the expiration of the government’s homebuyer’s tax credit. It seems without government involvement, the housing sector is expected to struggle.
“There is very little demand for housing of any kind,” economist at Capital Economics wrote. “New construction activity will remain quite depressed for some time,” said Meny Grauman, an economist for CIBC World Markets, to MarketWatch.
There are some market experts who feel the outlook isn’t as cloudy as the reports would leave you to believe. Despite the evaporation of the tax credit, some areas of the country are showing improvement, which hopefully means positive news leading into 2011.
“The decline may have overshot the mark,” wrote Peter D’Antonio, an economist for Citigroup Global Markets, who nonetheless agrees that “the housing market remains weak.”
“The noise associated with the credit has made assessing the housing market difficult,” D’Antonio said to MarketWatch.
Regardless, however, the numbers don’t lie and the economic reports released on housing over the past six months have been disappointing to would-be buyers, sellers and real estate professionals. Without positive readings on a dismal sector, confidence will continue to penetrate any potential hope for blue skies in the immediate future.