--- title: "Monday Update: Housing Surprises, But Still Signs of Recent Weakness" description: In today's Monday Update, CIO Brad McMillan reviews some unexpected numbers in the housing market, as well as areas of concern in the week ahead. image: https://blog.commonwealth.com/hs-fs/file-892407207-jpg/Images_IMO_Blog/Spring_2014/MarketOutlook_1.jpg --- [![The Independent Market Observer](https://blog.commonwealth.com/hubfs/IMO-Title-1.png "The Independent Market Observer")](https://blog.commonwealth.com/independent-market-observer) [![Commonwealth Financial Network](https://blog.commonwealth.com/hubfs/lockup_citron-1.png "Commonwealth Financial Network")](https://www.commonwealth.com/) - [Home](https://blog.commonwealth.com/independent-market-observer) - [About](https://learn.commonwealth.com/about/) ### ![print this page](https://blog.commonwealth.com/hs-fs/file-1376458285-gif/images/print.gif)Print # [Monday Update: Housing Surprises, But Still Signs of Recent Weakness](https://blog.commonwealth.com/independent-market-observer/monday-update-housing-surprises-but-still-signs-of-recent-weakness) Posted by [Brad McMillan, CFA®, CFP®](https://blog.commonwealth.com/independent-market-observer/author/brad-mcmillan-cfa-caia-mai) Find me on: [LinkedIn](https://www.linkedin.com/in/bradmcmillancfa) [Twitter](https://x.com/BradMcMillanCFA) This entry was posted on Oct 26, 2015, 1:50:00 PM and tagged [In the News](https://blog.commonwealth.com/independent-market-observer/topic/in-the-news) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/monday-update-housing-surprises-but-still-signs-of-recent-weakness#comments-listing) ![Monday update](https://blog.commonwealth.com/hs-fs/file-892407207-jpg/Images_IMO_Blog/Spring_2014/MarketOutlook_1.jpg "Monday update")As I wrote in a [previous post](https://blog.commonwealth.com/independent-market-observer/a-more-detailed-look-at-housing-demand), housing is a key reflector of consumer expectations. And even with recent signs of slowing in the economy, last week the housing market had some results that were much better than expected, pointing to continued growth. In today's Monday Update, I'll take a deeper look at the numbers. ##### Last week’s releases In short, last week’s data releases were all about the housing market. **National Association of Home Builders U.S. Housing Index.** Here, there was a surprise increase to 64 from the previous month’s level of 62. This was at the high end of expectations and is the highest level since 2005. **Housing starts.** With an increase to 1.206 million, this number is up 6.5 percent from the previous month’s 1.126 million, which itself was revised upwards slightly to 1.132 million. This number not only beat expectations but was above the upper end of the Bloomberg estimate range. It also brought the 6- and 12-month averages up to the highest levels since 2008 (according to Ned Davis Research). **Existing home sales.** These numbers were also strong, up by 4.7 percent over the previous month to 5.55 million. Again, this figure came in at the extreme high end of expectations, which had been projecting a slight decline. ##### A look at the week ahead This week will be a busy one for economic data. **New home sales** were released this morning, showing a surprise decline of 11.5 percent to 468,000. Expectations were for a much smaller decline of 0.6 percent. Although this decline is from a multiyear high in previous months, and the absolute level remains healthy, **the size of the decline is worrying**. Longer-term trends remain positive, however, and the strength of both starts and existing sales suggests this may be an outlier. Nonetheless, it bears watching. **Durable goods** **orders** will be released on Tuesday and are expected to decline by 1.2 percent, which is somewhat of an improvement over the decline of 2.3 percent in August. There is also additional downside risk from a drop in commercial aircraft orders, but these are typically volatile. Excluding transport, core orders are expected to be flat this month, as they were last month. This suggests that the industrial sector is still facing headwinds from a strong dollar and weakness elsewhere in the world, but that the situation has started to stabilize. **The** **Conference Board Survey of Consumer Confidence** will also be released on Tuesday. Expectations are for a small increase on lower gasoline prices and improvements in the stock market. This would also be consistent with results from other surveys. Confidence remains well above levels of concern, and a slower rate of increase is reasonable at this stage of the recovery. On Thursday, the first **estimate of GDP** for the third quarter will be released. Expectations are for a significant drop from the second quarter, down to a growth rate of 1.7 percent. The strong dollar continues to act as a headwind, hitting export growth and encouraging import growth, while inventories have also acted as a drag. Per trends we have discussed, slower growth is no surprise; at this point, it looks like growth will pick up again in the fourth quarter. Nonetheless, expect headlines about the decrease. Finally, the **personal income and spending** numbers will be released on Friday. Both are expected to decline: Income is expected to drop from a growth rate of 0.5 percent to 0.2 percent—on the back of two months of weaker-than-usual employment results. Spending is expected to decline from a growth rate of 0.4 percent to 0.2 percent, but this is at least partially due to lower gasoline prices. These numbers are consistent with the theme of slower but continuing growth and are not yet at worry levels. The last economic news for the week will be the conclusion of the most recent **meeting of the Federal Reserve**. After the surprise decision not to raise rates at the last meeting, the Fed is widely expected to sit tight again. Given the weakness of recent data, there is certainly no reason for the Fed to change its decision at this point. ##### An evolving slowdown This week’s data should give us some insight into how bad the slowdown is likely to be and—importantly—how that might be affecting both business and consumer spending. Although the underlying trends remain strong, we need to be conscious of how the current slowdown is evolving.                       [![Subscribe to the Independent Market Observer](https://no-cache.hubspot.com/cta/default/295024/3974018f-04fe-4bdc-bed0-7915635291d5.png)](http://cta-redirect.hubspot.com/cta/redirect/295024/3974018f-04fe-4bdc-bed0-7915635291d5)             - [Tweet](https://twitter.com/share) ### Subscribe via Email ![TMO\_IMO\_615x408\_sidebar](https://blog.commonwealth.com/hs-fs/hubfs/TMO_IMO_615x408_sidebar.png?width=1033&height=686&name=TMO_IMO_615x408_sidebar.png "TMO_IMO_615x408_sidebar") [Episode 20](https://vimeo.com/1201911815/0f4f028be9?share=copy&fl=sv&fe=ci) June 17, 2026 [Episode 19](https://vimeo.com/1191658257/1b43ce84dd?share=copy&fl=sv&fe=ci) May 13, 2026 [Episode 18](https://vimeo.com/1183174918/e227cf7d80?share=copy&fl=sv&fe=ci) April 15, 2026 [Episode 17](https://vimeo.com/1174554734/636f0f7aba?share=copy&fl=sv&fe=ci) March 18, 2026 [Episode 16](https://vimeo.com/1163757312/bc2f802d74?share=copy&fl=sv&fe=ci) February 11, 2026 [More](https://learn.commonwealth.com/monthly-media-placements) [![Insights\_CTA\_IMO\_233x400-1](https://no-cache.hubspot.com/cta/default/295024/interactive-187935228457.png)](https://blog.commonwealth.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLKWvuIp2K06%2B8QV8vog%2B1QGstf2lBQO%2Bp8NHOYgaMRU1fa8o8V0q7CVhELCbWEdLXojfIBkFMhBtJS0ywGNYQdLuRxQMUK5NgzUaouKIPHJ4uyn5EGXF2m1mqgSYNPo7MVwuolyNMCrPlruoSPJRgQuJn059z%2BHmNeuTMgaal51M1H1chl6oRWIyN0RextPKQd68JtIEf6WdI%3D&webInteractiveContentId=187935228457&portalId=295024) ### Hot Topics Select Category Ask Brad Commentary Economic Risk Factor Updates Economics Lessons Market Thoughts Videos In the News Investing Market Updates On My Bookshelf Politics and the Economy [![New Call-to-action](https://no-cache.hubspot.com/cta/default/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf.png)](https://cta-redirect.hubspot.com/cta/redirect/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf) ### Archives - 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