Healthy Rise for February Retail Sales; HARP Refinancings Topped 1 Million in 2012

Retail and food services sales rose 1.1 percent last month and 4.6 percent compared to February 2012.; nearly 1.1 million refinancings were completed through the federal HARP program last year.

The Census Bureau reported on Wednesday that U.S. retail and food services sales for February increased by 1.1 percent compared with January, and 4.6 percent compared with Feb. 2012. All together, retail totaled $421.4 billion for the month, adjusted for seasonal variations and holidays, but not price changes.


Even so, it turns out that retail sales increases were strong in February, despite persistent upticks in the price of gas. Remove gas from the equation and sales rose 0.6 percent for the month. Take out auto sales, and the increase was 1 percent.

The strong retail numbers came in spite of pre-March 1 hype about the sequester — which no one, in retrospect, seemed too worried about. Consumer spending was also up despite the increase in payroll taxes, which might mean that the perception of the increase wasn’t very much, or that higher-wage earners are spending more freely because of the wealth effect of a rising stock market and a housing market that seems to be recovering.

HARP Refis Strong in 2012

The Federal Housing Finance Agency said on Wednesday in its December 2012 Refinance Report that, including the mortgages refinanced through the Home Affordable Refinance Program (HARP) in the fourth quarter, nearly 1.1 million HARP refinances were completed in 2012. HARP allows borrowers with loans owned or guaranteed by the government-sponsored enterprises, and with high loan-to-value ratios, to refinance at considerably lower rates.

All together, almost 2.2 million refis have been completed since HARP started during the worst of the recession in April 2009, defying the low early expectations for the program. But the program does seem to be working as intended: participating borrowers are less likely to default than other homeowners in similar situations.

Among borrowers who refinanced through the program in December, 25 percent of loans had LTV ratios greater than 125 percent, according to FHFA. Also in December, 18 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.

Wall Street has been setting record highs lately, but on Wednesday the Dow Jones Industrial Average did something it hasn’t done since 1996 — gain for the ninth trading session in a row by rising 5.22 points, or a miniscule 0.04 percent. Still, up is up. The S&P 500 and the Nasdaq were up as well, by 0.13 percent and 0.09 percent, respectively.