This week has some important housing data
This week will have a lot of interesting data for homebuilders. We’ll get housing starts and building permits as well as the NAHB Housing Market Index. There will be more data coming about the manufacturing sector—we’ll see if last week’s disappointing industrial production numbers were backed up with any sort of anecdotal data out of these manufacturing surveys.
Economic data this week
Tuesday, February 18
Wednesday, February 19
Thursday, February 20
Friday, January 21
Earnings reports this week
Impact on mortgage REITs
Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are highly interest rate–sensitive. They’ll be at the mercy of the bond market’s machinations based on emerging markets concerns. Nothing coming out this week should affect the bond market at all. REIT analysts will want to see the delinquency and foreclosure data coming out of the Mortgage Bankers Association.
Impact on homebuilders
Analysts will watch housing starts data next week. Weather might end up having a dampening effect on starts, however. The builders have expressed optimism that this spring selling season will be strong. Existing home sales will also give clues about the overall activity in the real estate space. Homebuilders have been able to raise prices easily over the past year, but if real estate prices are moderating, then we could see the record-level gross margins they have been reporting begin to contract.
Impact on commercial REITs
There isn’t much coming out next week that is going to matter to the commercial REITs. The office REIT sector will focus on some of the manufacturing-related numbers as that would signal stronger economic growth which could pull down vacancy rates.
To learn more about office REITs, see The Fed’s economic growth forecast is good news for office REITs.