Big week for housing data and earnings
This week is relatively data-light. However, a slew of reports will interest real estate investors. On Monday, we get the National Association of Homebuilders Housing Market Index, which is a builder sentiment index. Sentiment has been falling among builders lately as land is getting more expensive. On Tuesday, we’ll get housing starts and building permits. On Wednesday, we’ll get mortgage application data, and on Thursday, we’ll get the FHFA House Price index and existing home sales. Finally, we’ll get earnings from three builders: D.R. Horton, Pulte, and NVR.
Economic data this week
Below is a summary of this week’s economic data.
Tuesday, July 18:
- NAHB Housing Market Index
Tuesday, July 19:
- housing starts
- building permits
Wednesday, July 20:
- Mortgage Bankers Association mortgage applications
Thursday, July 21:
- initial jobless claims
- Bloomberg Consumer Comfort Index
- Philly Fed
- FHFA House Price Index
- Chicago Fed National Activity Index
- existing home sales
- index of leading economic indicators
Friday, July 22:
- no economic data
Earnings this week:
Implications for mortgage REITs
REITs such as Annaly Capital Management (NLY) and American Capital Agency (AGNC) will likely focus on data that will move the bond market. Given the new interest rate backdrop, economic data probably won’t play that big of a role in bond market movements, at least for the near term. Inflation data, as opposed to “economic strength” indicators, will probably become the most important indicators. Note that the Federal Open Market Committee will meet the last week in July. Investors who want to bet on interest rates can look at the iShares 20+ Year Treasury Bond ETF (TLT).
Impact on homebuilders
Homebuilders such as PulteGroup (PHM) and CalAtlantic Group (CAA) will pay the most attention to housing starts and building permits, as well as builder earnings. Investors can get access to the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).
In the next part of this series, we’ll discuss what happened last week.