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Wednesday, February 26, 2014

Thursday: Yellen Testimony, Weekly Unemployment Claims, Durable Goods Orders

by Calculated Risk on 2/26/2014 08:13:00 PM

From Kris Hudson at the WSJ: Builder Borrowing Picks Up

Bank lending for land development and construction is turning up after hitting a 14-year low early last year, a sign that the supply crunch for new homes could ease in coming months.

Data released Wednesday by the Federal Deposit Insurance Corp. show that the outstanding balance on loans for land acquisition, development and construction rose in the fourth quarter to $209.9 billion, compared with $206 billion in the third quarter. While that's a relatively small gain, economists note that if the overall balance is growing it means that originations of new loans are likely rising even faster. It was the third consecutive quarter of growth.

An increase in lending would spur additional home construction and possibly put downward pressure on prices, which have been rising rapidly over the past two years and weighing on the housing recovery.
In 2013, homebuilders pushed prices. I think prices for new homes will increase less this year (possibly flat or down in some areas), and the builders will deliver more homes.

• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 335 thousand from 336 thousand.

• Also at 8:30 AM, Durable Goods Orders for January from the Census Bureau. The consensus is for a 1.0% decrease in durable goods orders.

• At 10:00 AM, Testimony, Fed Chair Janet Yellen, Semiannual Monetary Policy Report to the Congress, Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate

• At 11:00 AM, the Kansas City Fed manufacturing survey for February. This is the last of the regional Fed surveys for February.