Key economic indicators continued to show that the economy was improving in January and February, but that housing remained weak. The employment situation improved in February, following a poor result in January, but job creation remains weak when compared to what is required to significantly reduce the unemployment rate. Consumer confidence also continued to improve, with consumers anticipating significant gains in employment over the next year.

While existing home sales rose in January, new-home sales returned to the depressed levels of the second half of 2010. The large inventory of existing homes and high foreclosure rate — providing an increasing share of distressed sales — continued to put downward pressure on house prices, with the two key indexes of housing prices falling again in December.

Residential construction spending improved in January, but it was driven by a strong rise in improvement spending. There was only a modest rise in single-family construction spending, as well as a moderate decline in the more volatile multifamily construction spending.

– Courtesy of NAHB