A couple of economic reports released today provided a muddied forecast of what might come from this point forward through at least until the third quarter of this year. The National Association of Home Builders (1) released its own builder’s sentiment index, showing a one point decline to 56.

The real estate investingnumber is an indication of a positive or negative outlook as reported by individual home builders during a survey. A 50 for example indicates an outlook that is as equally positive as negative. 56 shows a slightly positive view and down four points from the December picture.

Apparently the most troubling to home builders has been an increase in construction costs which in turn drives up the price of new homes, disqualifying many borrowers or requiring a larger loan amount. Other complaints included appraisal issues that conflicted with the contract prices on homes. Jointly, the Mortgage Bankers Association reported a drop in mortgage applications for newly constructed homes by 11 percent from November to December.

The Philadelphia Federal Reserve Bank also reported that business activity notched at 9.4 points, compared with a 6.4 reading just last month, showing a sizable gain especially compared to the 8.6 expected. However, another component of the report, the one that predicts future factory orders fell by more than half in December to 5.1 from 12.9.

The series of reports continues to show signs of cautious pessimism by certain economic sectors as when positive economic numbers are reported, it’s safer to take the slow road rather than the one to recovery. Perhaps because the economy, although out of the recession created by the housing crisis in the last decade, is still barely trudging along with no real signs of positive growth. For real estate investors, it indicates more of the same with a gradual increase in home values and a greater demand for rental housing.

(1) http://tinyurl.com/ogms5mn