Housing Market, Home Improvements, Weight Watchers
October 19, 2015
Monday – October 19
Home builders across the nation continued to be upbeat on their sector in October due in part to firm job creation, economic growth and the release of pent-up demand. The National Association of Home Builders reported on Monday that its Housing Market Index rose to 64 this month, above the 62 expected and up three points from September. It was the highest level seen since late 2005. Any number over 50 indicates that more builders view conditions as good rather than poor.
Home improvements and updates are on pace to set a record in 2015, fueled by home price gains and continued low mortgage rates. According to the Leading Indicator of Remodeling Activity released on Monday by the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) of Harvard University, improvements are expected to rise by 2.4% in the current quarter from the previous quarter. In addition, the study went on to say that remodeling will improve by nearly 7% in the second quarter of 2016. The rise in home prices enables homeowners to pull money in the form of home equity loans and lines of credit for remodeling jobs.
Shares of Weight Watchers are soaring today after billionaire TV personality Oprah Winfrey invested a 10% stake in the company. Ms. Winfrey will endorse the products from Weight Watchers and will also join its Board of Directors. The question will be whether or not Ms. Winfrey can jump start a company that is on the downturn. Weight Watchers had operating cash flow of $400 million in 2011, which has fallen to $230 million in 2014 and also carries about $2.5 billion in debt.