While job creation since the economic recovery has been tepid, the housing market is turning around nicely, with housing prices and sales climbing steadily in the past year.
A slew of February housing data this week should confirm that trend. After falling 8.5% in January, economists expect a 2% rebound in housing starts in February to a seasonally adjusted rate of 915,000. Sales of existing homes for last month are also expected to improve to 5 million, compared with 4.92 million in January.
"Our housing market is healing, and consumers, patients, and homeowners enjoy stronger protections than ever before," wrote President Barack Obama in the White House's annual economic report, which was delivered to Congress last week. Of course, many Wall Street experts argue that the strength of the housing market recovery is all dependent on the Federal Reserve's loose monetary policies, which they believe could send inflation soaring in the future. The Federal Reserve will meet next week to discuss its policies, and whether they should be continued.
Chairman Ben Bernanke has long held that he will not scale back his agency's easy-money and low interest rate-program until the unemployment rate falls to 6.5% or if the inflation rate hits 2.5%. Given that we have yet to hit either figure, we can probably expect Bernanke to maintain the status quo until the middle of 2014.