The Commerce Department today released some data indicating the economy is headed in the right direction. Builder’s confidence is higher and is reflected in the number of new housing starts in July to a seasonally adjusted 1.2 million units. That’s the strongest number in eight years. Retail sales are up and industrial output for Q3 initially looks strong.* This is a direct response to lower inventory and stronger demand for housing. This demand is continuing to drive property values higher, both in residential as well as multi-family housing. This also means rents are on a steady rise. Now let’s look at the Dow.

The Dow has been rocked over the past two weeks on the heels of a struggling Chinese economy and China’s efforts to boost exports. The Dow had been somewhat comfortably above the 18000 mark but nearly fell below 17000 last week before recovering. Now, the new Dow normal appears to be in the mid-17000 range. Investors with funds in equities have been watching their portfolios languish and mutual fund returns are typically no different. Bond yields have settled back a bit and mortgage rates have drifted lower.

Real estate investors are looking for more opportunities as signs of a strengthening economy, rising rents and higher real estate values are one of the true bright spots. Real estate investors are continuing to enjoy the best of both worlds—rising rents and low financing costs. It’s not that difficult to find opportunities where the property easily cash flows each month. And talk of a September rate increase by the Fed has softened. A rate increase perhaps sometime this year but we’ll have to see how the strong dollar affects exports. We’ll get an initial read on Q3 GDP in November.

* news August 18, 2015