In February, consumer confidence plunged to its lowest level since October 1993, marking the third month of falling levels. Fear of war with Iraq, surging energy prices, and a weak labor market contributed to the drop. Homeowners -- sour in their outlook for the future -- could be rethinking their remodeling plans.
Existing home sales
Existing home sales rose again in January, breaking the 6 million unit mark for the first time ever. The previous record was set in January 2002. Interestingly, new home sales fell sharply in January, but that figure is probably an anomaly. Both new and existing home sales are expected to moderate only slightly this year.
Leading economic indicators
The Conference Board's Index of Economic Indicators fell slightly in January, after rising for three straight months. On a more positive note, economic growth in the fourth quarter of 2002 was revised up to a 1.4% annual rate, double the initial estimate.
Second mortgage interest rates
Financing costs for remodeling projects became even more favorable in February. A weak economy helped drive down second mortgage interest rates to 4.76%, according to Fannie Mae. The previous record low of 4.94% was set in December 2002.
Per capita disposable income
Personal income growth remains a positive force in the economy. Per capita disposable income rose at a 1.1% inflation-adjusted annual rate in January. This is down from a 2.9% rise in December 2002 but still represents good growth.