Retail sales dropped in March by the most in nine months, pointing to a slowdown in consumer spending as the first quarter drew to a close, according to a Commerce Department report.
Housing is a bright spot as Fed purchases of bonds push down mortgage rates to near-record lows. The S&P/Case-Shiller index of home values in 20 cities surged 9.3% in February from a year earlier, the most since May 2006.
“That certainly will help the economy,” Robert Shiller, the Yale University economics professor who co-created the index, said yesterday in a Bloomberg Radio interview. “It will lift a lot of households that are currently underwater.”
New-home construction in the U.S. climbed in March to the highest level in almost five years, propelled by a surge in multifamily building. Starts climbed 7% to a 1.04 million annual rate, the Commerce Department said April 16. Work on multifamily homes jumped 31%.
The construction rebound helped Weyerhaeuser Co. exceed profit and sales estimates in the first quarter. The lumber producer, based in Federal Way, Washington, said housing will probably become a bigger part of its business.
“The U.S. housing market continues its recovery towards long-term trend demand levels,” Chief Executive Officer Dan Fulton said on an April 26 conference call. “The drop in available home inventory is leading to price increases in most markets and increasing demand for new homes, resulting in an increase in housing starts.”