Again, surprising economic data is being written off as being caused by non-recurring factors.

The economic data from last week was centered on the housing sector. It is evident this sector is being affected by the lack of home inventory on the market. The drop in existing home sales and housing starts reported did not keep median home prices from continuing to climb. Building permits did rise, indicating the weakness reported may not continue going forward. Input costs including building materials continue to rise with shortages in lumber and other materials plaguing the industry. There is also a shortage of labor for both skilled and unskilled to increase construction activity. We believe the housing sector will ramp up again in the next three months with low mortgage rates offsetting rising prices to allow home ownership to be affordable going forward.