Housing starts and permits exceed expectations

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Published Date 10/18/2024

Yesterday MBS prices declined; weekly jobless claims were lower than thought, September retail sales were much stronger than forecasts at 0.3%, reported +0.4%; ex vehicles thought to be +0.1% month/month increased 0.5%, excluding vehicles the forecasts were +0.3% but jumped 0.7%. The increase jumped from 0.1% in August. Reaction to the better data sent the 10 year note up 7 bps, the 2 year +3 bps and MBS prices down 29 bps.

Also yesterday the ECB cut its base rate by 25 bps as expected, the third cut this year. The ECB inflation rate cooling quicker than in the US, now at 1.8% with ECB’s target the same as US 2.0%.

Overnight the 10 year note traded above its technical support at 4.10% to 4.12% but when US trading began the note dropped back to 4.09% unchanged form yesterday.

The only data today, September housing starts and permits; starts expected at 1.400 million reported at 1.354 million, August revised from 1.356 million to 1.361 million. Starts of houses with five units or more sank by 4.5% from the previous month, which totaled an annualized rate of 317 thousand, while starts of single-family homes rose by 2.7%, equivalent to an annualized rate of 1.027 million. Among different geographical regions, starts fell in the south (-3.4% to 738 thousand), the West (-10.1% to 257 thousand), and the Midwest (-9.1% to 179 thousand). On the other hand, housing starts rose sharply in the Northeast (57.9% to 180 thousand).

Permits expected 1.500 million reported at 1.428 million. Approvals of units in buildings with five units or more tumbled by 10.8% to a rate of 398 thousand and single-family authorizations went up by 0.3% to 970 thousand. Across different US regions, there were decreases in permits in the Northeast (-13.1% to 126 thousand), the Midwest (-2.9% to 200 thousand), and the South (-6.1% to 765 thousand), while increases were reported in the West (10.9% to 337 thousand).

There is a litany of Fed officials speaking today including Atlanta Fed President Bostic.

At 9:30 am the DJIA opened -50, NASDAQ +102, S&P +13. 10 year at 9:30 am 4.07% -2 bps. FNMA 5.5 30 year coupon at 9:30 am +4 bps from yesterday’s close but 7 bps lower than 9:30 am yesterday.

Source: TBWS

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All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Darren Orshoff is a Marketing and Real Estate professional, licensed Realtor with the California Department of Real Estate DRE#01803671 with WSR Real Estate DRE#01977642.  Darren is also a Certified Mortgage Planner, A Certified Financial Literacy Coach, A Dave Ramsey Trained Financial Coach, A Certified Mortgage Advisor, and while Darren is licensed by the NMLS, he is not originating loans but refers lending transactions to Golden Empire Mortgage, Inc. ("GEM") [NMLS ID No. 2427] licensed by the Department of Financial Protection and Innovation pursuant to the California Residential Mortgage Lending Act, for which he represents as the Corporate Marketing Coordinator.

Darren Orshoff

Realtor, Marketing Guru, Sushi Lover, Dad, Ham

License: CalDRE#01803671

The Key To Your Home!™ at WSR

6736 Palm Avenue, Riverside CA

Office: 951-468-8326

Cell: 951-323-2119

Email: darren@darrenorshoff.com

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