Dividends and US housing market see improvement in November as manufacturing also rebounds

All economists need data to look back in order to project into the future and some of the most important data from the government is how is the housing market doing? The good news as reported by Lucia Mutikani of Reuters is US homebuilding increased more than expected in November and permits for future home construction surged to a 12 and half year high as lower mortgage rates continue to boost the housing market.

From the housing market, there are a number of expectations, one anyone who buys a new home must also furnish it – need appliances and many other things. Likely the owner will need a vehicle or they are spending money in the hopes their neighborhood will rise in value over the years. Often times, those buying a home are seen as stabilizing force because the bank has determined their stream of income has the ability to pay the mortgage until renewal in a few years.

The other piece of information was manufacturing – although the GM plants boosted automobile plants; Boeing is still having problems with the 737 Max Jetliner and has slowed or stopped production.

For housing the seasonally adjusted rate is 1.365 million units. As expected at this time of the unit, there were more starts in the South than the Midwest and Northeast. Although it is good that single family housing is being done, the reality is many Americans can only afford to rent and multifamily buildings did jump 4.9% to a rate of 427,00 units in October.

Linking to dividend paying stocks, every month there is new data to examine but you need to look at a snapshot to ensure your personal view of the world or the economy is what is happening. The home building index and the manufacturing output gives you an indication of what is happening. It is important to note the economy is heavily oriented to services and retail shopping, but all indexes gives you the ability to see a trend. Is that a good trend? If yes then you may not have to any adjustments to your portfolio. If the trend is no, then you need to check if the profitable companies you own can continue to pay their dividends.

There are more questions than answers, till the next time – to raising questions.

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