According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.7% in January 2014, after 0.8% in December. This decline was mainly due to energy price developments. At the same time, the inflation rate in January 2014 was lower than generally expected.
Housing markets remain very strong even though mortgage rates have moved up somewhat from the very low levels seen at the beginning of the summer. Single-family housing starts jumped to an annual rate of 1.62 million units in October, a record high for this series. Moreover, sales of both new and existing homes have also held near historical highs.