Interest rates this week reached an all-year low for 2014, dropping to 4.1 percent, the lowest level since June 2013. Despite the very attractive rates, new mortgage applications have stayed relatively flat. Chalk it up to a late summer August malaise?
On the other hand, new home construction soared in July, climbing nearly 16 percent. This was good news after a few straight months of sluggish growth for home permits. Home construction also correlates to a boost in sales for home improvement stores such as Lowe's and Home Depot, another sign of a healthy economy.
In other encouraging news, median incomes have finally grown this year - one of the sticking points of the recovery thus far. Income gains are crucial for home sales and home improvement projects, which can raise your home's value over the long term.
Despite these gains, consumers are still proving to be cautious in where they spend their dollars. Retail sales were stagnant from June to July, suggesting consumers are still too wary to spend freely. August spending reports will be an important indicator with back-to-school sales critical to easing into a strong fall economy.
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