Morning Report – Housing Starts disappoint

Posted on April 16, 2014 by Brent Nyitray

Vital Statistics:

 

  Last Change Percent
S&P Futures  1847.7 8.1 0.44%
Eurostoxx Index 3126.3 34.8 1.13%
Oil (WTI) 104.6 0.8 0.82%
LIBOR 0.228 0.002 0.66%
US Dollar Index (DXY) 79.7 -0.104 -0.13%
10 Year Govt Bond Yield 2.64% 0.01%  
Current Coupon Ginnie Mae TBA 105.7 -0.1  
Current Coupon Fannie Mae TBA 104.4 0.0  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.26    

 

Markets are higher this morning as earnings are coming in better than expected. Bonds and MBS are down small.
 
Mortgage Applications rose 4.3% last week, the first increase in a month. Both purchases and refis rose.
 
Industrial Production rose .7% in March, and capacity utilization rose to 79.2%, the highest since mid-2008.
 
Housing starts came in at a 946k pace in March, lower than the 970k street estimate. Building Permits were 990k, again south of expectations. Single family starts were up half a percent, while the volatile multi-fam segment fell 6.4%. Activity rebounded in the Northeast, but the South and West were down. 
 
Speaking of the builders, according to the NAHB, homebuilder sentiment improved slightly in April from a downward-revised March reading. So far, it is looking like the Spring selling season is going to be nothing special, as ongoing tight credit conditions and capacity constraints keep a lid on optimism. 
 
Believe it or not, some places in the country are finding they have to raise wages in order to attract talent. Mark Zandi, chief economist at Moody’s says there are spot labor shortages that will probably broaden out over the next year as the job market steadily improves. 

Filed under: Morning Report |

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52 Responses

  1. novahockey, on April 16, 2014 at 8:59 am said:

    Regarding refi — i consolidated a 1st and 2nd into one 30yr fixed. closed in Sept/Oct. And they are calling me again trying to push me into a 5/1 ARM. the response to, but rates might not be low in 5/1 is “well, nobody keeps a loan for 30years”

    i’ll stick with 4.5%.

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  2. Brent Nyitray, on April 16, 2014 at 9:03 am said:

    The average weighted expected life of a newly originated loan is just over 6 years. But I agree, the government is basically begging to get ripped off by lending you money at 4.5% for 30 years.

    I told my wife if I ever get hit by a beer truck, do not pay off our 3.75% mortgage.

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  3. novahockey, on April 16, 2014 at 9:13 am said:

    Bruins in 7
    Canadians in 6
    Penguins in 5
    Rangers in 7

    Ducks in 6
    Sharks in 6
    Aves in 5
    Blues in 6

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  4. jnc4p, on April 16, 2014 at 9:19 am said:

    I’ve always preferred 15 year fixed rate mortgages myself.

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  5. I'm Now Kevin's Biatch, on April 16, 2014 at 9:21 am said:

    The trick with life insurance is to make sure your wife and family are taken care of, but not *to* taken care of.

    Know what I mean?

    #Sleepwithoneeyeopen

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  6. novahockey, on April 16, 2014 at 9:21 am said:

    “The average weighted expected life of a newly originated loan is just over 6 years”

    He brought that up repeatedly. and i get that. and a sub 3% ARM sounds great. and if i was at 5+ i might do it. but i’m not. He was basically willing to cover all expenses. but i don’t want to keep extending the payback period for 30 yeasr. i’ve been in the house 4 years and am on my 3rd loan. 5.5, 5, 4.5.

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  7. Michigoose, on April 16, 2014 at 9:46 am said:

    Someday maybe I’ll learn that you can’t really explain Libertarianism to people who think that Libertarians are somewhere to the right of Satan.

    Pass me a cigar and some single malt, would you, NoVA?

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  8. novahockey, on April 16, 2014 at 9:52 am said:

    [snaps fingers at staff]

    A snifter for the, Lady! Make haste.

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  9. jnc4p, on April 16, 2014 at 10:08 am said:

    “Michigoose, on April 16, 2014 at 9:46 am said:

    Someday maybe I’ll learn that you can’t really explain Libertarianism to people who think that Libertarians are somewhere to the right of Satan.”

    “Better to reign in Hell than serve in Heaven.” – Milton

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  11. Michigoose, on April 16, 2014 at 10:10 am said:

    jnc:

    You busy tomorrow? If I come down, do you have time for lunch or dinner?

    EDIT: let me see what train ticket I can get; I’ll get back to you via e-mail.

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  12. Michigoose, on April 16, 2014 at 10:12 am said:

    Bloomberg: Obama’s arrogant.

    Talk about pot:kettle!

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  13. jnc4p, on April 16, 2014 at 10:17 am said:

    You see this Bloomberg quote:

    “Pointing to his work on gun safety, obesity and smoking cessation, he said with a grin: “I am telling you if there is a God, when I get to heaven I’m not stopping to be interviewed. I am heading straight in. I have earned my place in heaven. It’s not even close.””

    http://www.esquire.com/blogs/politics/mike-bloomberg-challenge-to-nra-041614

    He needs to reread his Milton. God won’t suffer a competitor. There’s only room for one tyrant in Heaven.

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  14. novahockey, on April 16, 2014 at 10:25 am said:

    “when I get to heaven I’m not stopping to be interviewed”

    i wrote a short story in 8th-9th grade about St. Peter at the Pearly Gates. it was about having to have your passport and declarations form in order before you got in.

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  15. Brent Nyitray, on April 16, 2014 at 10:25 am said:

    Now was Milton trying to tell us that being bad was more fun that being good?

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  16. jnc4p, on April 16, 2014 at 10:28 am said:

    NoVA, I still have my confirmation paperwork saved just in case.

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  18. I'm Now Kevin's Biatch, on April 16, 2014 at 10:36 am said:

    Nice Animal House quote.

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  19. Brent Nyitray, on April 16, 2014 at 10:37 am said:

    Knowledge is good – Emil Faber

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  20. novahockey, on April 16, 2014 at 10:41 am said:

    [as St. Peter]

    Well, JNC, this appears to be in order. We’re willing to overlook your lack of faith because you didn’t use force to impose your views on others. Welcome to Heaven. the craps table pays out at true odds.

    [stamps passport]

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  21. Michigoose, on April 16, 2014 at 10:41 am said:

    Now was Milton trying to tell us that being bad was more fun that being good?

    NoVA, would you mind snapping your fingers again? Thanks.

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  22. novahockey, on April 16, 2014 at 10:44 am said:

    [snap]

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  24. I'm Now Kevin's Biatch, on April 16, 2014 at 11:56 am said:

    Funny.

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  27. Michigoose, on April 16, 2014 at 12:23 pm said:

    McWing:

    I didn’t see anything new and startling in your NYTimes link. Nor did I really walk away with your interpretation of it.

    Interesting side note: I hadn’t put two-and-two together at all, but now I remember that it was Mr Miller’s/Cross’ activities that led to the XVIII Airborne Corps specifically banning military members joining or participating in activities with the KKK. I knew two card-carrying members of the KKK who had to resign. For both of them it was pretty much just carrying on a family tradition rather than something that they really believed in, but (coming from Michigan) it was pretty shocking to find out that I knew KKK members.

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  28. I'm Now Kevin's Biatch, on April 16, 2014 at 12:35 pm said:

    Ok Michi, that’s interesting.

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  29. I'm Now Kevin's Biatch, on April 16, 2014 at 12:35 pm said:

    Plus, Medicaid doesn’t prolong life.

    “And this is a key problem for the states. While the federal money is indeed generous for the newly eligible population, it is less so for the rest. For your currently eligible population, you only have the regular Medicaid matching rate, which ranges from 50 to 76 percent. For Texas, it’s around 60 percent. Kaiser calculates that over the first five years of the program, 95.7 percent of the funding will come from the federal government, and not the state. But the state doesn’t agree – they understand that one of every four Texans currently eligible for the program isn’t signed up, and that for this population, they’ll only have a match of around 60 percent. As the report linked above notes, “The Texas Health and Human Services Commission estimated that Texas alone will be forced to spend $27 billion – more than the program’s entire annual budget today.”

    Why do Progressives want the poor to die?

    http://news.heartland.org/newspaper-article/2012/07/09/why-states-are-rejecting-obamas-medicaid-expansion

    http://www.nejm.org/doi/full/10.1056/NEJMsa1212321#t=articleTop

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  30. jnc4p, on April 16, 2014 at 12:35 pm said:

    Brent, I used your Bloomberg piece to throw a grenade into the daily PL raise the minimum wage thread.

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  31. Brent Nyitray, on April 16, 2014 at 12:38 pm said:

    How did it go over? Are they claiming the article is a lie because wages never increase without government mandating it?

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  34. I'm Now Kevin's Biatch, on April 16, 2014 at 12:52 pm said:

    This’ll get them out of Ukraine, garauntee-fucking-teed!

    https://twitter.com/alanagoodman/status/456451868982788096

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  35. jnc4p, on April 16, 2014 at 12:56 pm said:

    “Brent Nyitray, on April 16, 2014 at 12:38 pm said:

    How did it go over? Are they claiming the article is a lie because wages never increase without government mandating it?”

    Denialism. I was trying to make a point on the bifurcation of the labor market between those considered employable and the long term unemployed, but the general consensus is that unemployment is caused by employer discrimination and spite. Individuals are victims who can do nothing to actually improve their chances of getting a job themselves.

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  36. I'm Now Kevin's Biatch, on April 16, 2014 at 12:58 pm said:

    What about racism? Can’t believe they’d leave that off the list.

    Unless they’re being racist themselves.

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  37. Michigoose, on April 16, 2014 at 1:02 pm said:

    Individuals are victims who can do nothing to actually improve their chances of getting a job themselves.

    I may have to go visit PL. Current thread?

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  38. Brent Nyitray, on April 16, 2014 at 1:17 pm said:

    Re the Bloomberg article, the Beige Book just came out.

    http://www.federalreserve.gov/monetarypolicy/beigebook/files/BeigeBook_20140416.pdfHere

    Here is what they had to say about the labor market:

    Employment, Wages, and Prices. Recent reports on labor market conditions were
    mixed but generally positive. For example, the New York, Chicago, and Minneapolis Districts saw modest to moderate growth in employment. Dallas noted that transportation and manufacturing firms added jobs. Boston, however, indicated that few firms outside of advertising and consulting were hiring. Both Philadelphia and Atlanta said that firms planned to make capital expenditures to boost efficiency before they would hire. Employers in the New York, Cleveland, Richmond, Chicago, Kansas City, and Dallas Districts reported difficulty finding skilled workers. More specifically: New York, Richmond, and Chicago mentioned the IT field, Atlanta noted a need for truckers, Kansas City cited labor shortages for skilled positions, and Dallas reported that a food manufacturer found skilled labor in short supply.

    In most Districts, wage pressures were generally portrayed as contained or minimal. For example, New York reported only scattered wage pressures and Philadelphia added that very few contacts are seeing wage pressures. In Cleveland, wage pressures were contained, Minneapolis reported that wage increases were moderate. However, Dallas cited several reports of upward wage pressures, and San Francisco added that wage gains remained quite modest overall but noted increases for certain occupations and in certain areas.

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  39. I'm Now Kevin's Biatch, on April 16, 2014 at 1:27 pm said:

    Yup, racism.

    Straight up.

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  40. jnc4p, on April 16, 2014 at 1:50 pm said:

    “More specifically: New York, Richmond, and Chicago mentioned the IT field”

    Random speculation, but the Windows XP end of life is going to provide a substantial short term boost to IT I suspect. Everyone was waiting to see if Microsoft was actually serious this time about ending XP before committing.

    Dell is heavily backordered for all new systems from what I can tell.

    On the other hand, I don’t think this will help Microsoft much in the long term. Everyone I know who is upgrading is going to Windows 7 & Office 2010 or the traditional version Office 2013. I don’t know of any businesses that are going to Windows 8 or Office 365.

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  42. Michigoose, on April 16, 2014 at 6:07 pm said:

    OK–if any of you want to get me a gift, please get me one of these:

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  43. I'm Now Kevin's Biatch, on April 16, 2014 at 6:09 pm said:

    The arrogance displayed here are magnificent.

    These people are our betters!

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  44. markinaustin, on April 16, 2014 at 7:39 pm said:

    On what are they betting?

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  46. Michigoose, on April 16, 2014 at 8:17 pm said:

    Relax, Mark. We’re all actually still relevant.

    The game provides an excellent real-world laboratory for testing cognitive ability under pressure.

    Oh, please. Any one of a number of FTXs that I was on as an Army officer is more realistic than this game. This is what gamers think the world is like, not what it is really like.

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  47. Michigoose, on April 16, 2014 at 9:38 pm said:

    jnc:

    You’re fighting an uphill fight explaining the difference between “lawn” and “federal land” on PL.

    But, then, I’m sure you know that. . .

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  48. jnc4p, on April 16, 2014 at 9:42 pm said:

    Ezp’s argument is completely idiotic.

    Michi, I assume you agree that federal lands aren’t the same thing as your lawn.

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  49. Michigoose, on April 16, 2014 at 10:20 pm said:

    I assume you agree that federal lands aren’t the same thing as your lawn.

    Errrr, yeah.

    EDIT: you might want to ask NoVAjr to pronounce that. I’m not sure I can get the right inflection given the fonts available

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  50. Brent Nyitray, on April 17, 2014 at 7:44 am said:

    Elizabeth Warren sounds like even a worse harpie than she comes across…

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  51. novahockey, on April 17, 2014 at 8:14 am said:

    Even if she’s right.

    I once ran a call where we found someone in the passenger seat. There was no driver, so initially we thought we had a runner. which happens. turns out she wasn’t belted, bounced off the windshield and landed in the passenger seat.

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  52. jnc4p, on April 17, 2014 at 10:00 am said:

    “so initially we thought we had a runner.”

    Logan’s Run flash back. You can be the Sandman.

    http://en.wikipedia.org/wiki/Logan%27s_Run_%28film%29

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