By Robert J. Sheehan II. Remodeling market index
Remodeler's perceptions of their markets flattened out in the fourth quarter of last year. The NAHB's Current Remodeling Market Index (RMI) of 45.0 was nearly the same as the 45.7 for the third quarter. An index over 50 indicates that more remodelers view conditions as favorable than unfavorable.
Record existing home sales
Existing home sales in January rose above a 6 million-unit annual rate for the first time in history, according to the National Association of Realtors. Mild weather in a large portion of the country helped explain some of the sharp 16% increase over December, but the housing market has not really been affected by the recession. The median sales price of existing homes was $151,500 in January, 10% above a year ago.
A surprising drop in the Consumer Confidence Index -- from 97.8 in January to 94.1 in February -- was sobering in an otherwise positive economic atmosphere. The weaker assessment of the economy was broad based among demographic groups and regions of the country. For more information, visit the Conference Board's Web site ( www.conference-board.org).
In January, disposable per capita personal income jumped at an 18% annual rate. Lower income tax rates, unemployment benefits, and insurance payouts accounted for the sharp rise. Wage and salary income (adjusted for inflation) fell, however, which partly explains the drop in consumer confidence.
Leading economic indicators
The Index of Economic Indicators rose for the fourth straight month in January. Adding to the optimism for an end to the recession was the upward revision in economic growth by the U.S. Department of Commerce, from the initial estimate of 0.2% to a 1.4% annual rate in the fourth quarter. Consumer spending was even stronger than first estimated.