Morning Report: Housing starts weak, but sentiment strong

Vital Statistics:


Last Change
S&P futures 2865.5 10
Oil (WTI) 62.69 0.66
10 year government bond yield 2.38%
30 year fixed rate mortgage 4.17%


Stocks are higher this morning as the market continues its rebound. Bonds and MBS are flat.


Housing starts rose 5.7% MOM to 1.23 million in April, which is down about 2.5% from a year ago. March was revised upward to 1.17 million. Building Permits rose to 1.3 million, up a touch from March, but down 6% YOY. We saw an increase in activity in the historically lagging areas – the Midwest and the Northeast. You would have thought that increasing home prices would drive more construction, but so far there is no evidence of that. Costs are increasing, especially labor costs. Tariffs are also being blamed, but lumber prices are down over 50% from a year ago.




Despite the slow and steady pace of new homebuilding, builder confidence did improve markedly in April, according to the NAHB Housing Market Index. “Builders are busy catching up after a wet winter, and many characterize sales as solid, driven by improved demand and ongoing low overall supply,” said NAHB Chairman Greg Ugalde. “However, affordability challenges persist and remain a big impediment to stronger sales.” “Mortgage rates are hovering just above 4% following a challenging fourth quarter of 2018 when they peaked near 5%. This lower interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace,” said NAHB Chief Economist Robert Dietz.  “At the same time, builders continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability.”


Initial Jobless Claims rose to 220,000 last week. The labor market continues to be strong.



28 Responses

  1. Ugh. Former Onion writers regret they weren’t more woke:


    • The Diamond Joe articles were great.


    • Pure humblebrag virtue signaling. He wanted to point out how awesome he and funny he is and how important he’s been to the direction of politics in America, and also excuse his previous soft-pedaling of Uncle Joe (which is the only thing they were ever going to do with Obama’s VP) while attacking him now in hopes of getting truly Woke Democratic nominee, under the almost certainly mistaken belief that one of the McGovern-types running against Joe could beat Trump.

      Only Sanders stands a chance there, I think, and I’d still say that’s being charitable.

      But the writer of that article comes across as a serious, serious douchebag.

      As if the mission of The Onion should have been to expose the real Joe Biden to public scrutiny or something. Eh, whatever.

      I think this is part of the fantasy the left is presently experiencing where–possibly because Trump is so awful–this is there chance to get a real progressive in the office, someone who says all the right things on even the furthest-left of issues. As is often the case, I think they are getting far too ahead of themselves, at and present Joe is actually the best chance they have of beating Trump. Most of the remainder of the field would be 100% guaranteed to lose against Trump, no matter how many polls predicted they would win by 97%.

      And if they ever got a Beto or Harris or Warren into the presidency, there’d be a Republican takeover/expansion in the house and senate so fast it’d make their heads spin.

      Eh. “Shut up and sing!” Or, as Homer said about TV: “Stupid website! Be funny!”


    • This was the least self aware part:

      “We knew through inside sources that at the time people in the White House loved those pieces, and that should have been a red flag. As a guideline, if the people you’re satirizing aren’t mad, then you should dig deeper.”

      Did he ever ask that question vis-a-vis Obama himself?

      Liked by 1 person

  2. I thought of you this morning, Brent, as I was following a gentleman driving a car with a MICA license plate. I’m guessing he’s a high muckety muck at the school, because his plate number was MCA0009.


  3. I suspect another lawsuit will arise out of this:

    Liked by 1 person

    • I suspect it will. It’s at the wrong level to help the disadvantaged, anyway. Inaccurately scoring doesn’t help anybody. It just means their test scores don’t mean anything because they are putting their thumbs on the scale. Saying a person has a higher score than they otherwise would have is just a way to get that person into a college or program they aren’t capable of actually completing, unless it’s known the score is bogus and all their courses are similarly adjusted.


  4. Lulz


  5. Self serving, and ironic considering the source.

    But not wrong:

    “It’s Time to Hold American Elites Accountable for Their Abuses

    If Democrats want to address simmering middle-class anger, they need to deliver justice.

    Rahm Emanuel”


    • The left will never understand how many people are rebelling against their cultural hegemony… I don’t think it even dawns on them, or they just dismiss it as racism..


      • The problem for progressives is people hear, remember and take seriously their rhetoric:

        “Hal Netkin, 83, recited almost verbatim a monologue presented the previous night by Carlson on Democratic policy regarding the extension of health care to illegal immigrants. “The Democratic Party has abandoned any pretense that America exists to benefit Americans. They tell us our country is innately evil, that it was conceived in racism for the purpose of oppression, we are a sinful nation. And to redeem ourselves, we must sacrifice for the world’s poor, among many, many, many other things. This means paying the health-care bills of foreign nationals who have no right to be here in the first place,” said Netkin.”

        Liked by 1 person

        • They also don’t get that the face of their party is the SJW left…


        • Time will tell, but it seems like Trump presented them with an opportunity to take the presidency and at least retain the house, and they are squandering the first and possibly the latter. I can’t imagine that their current arguments and campaign promises are going to win them the day. And even Uncle Joe doesn’t seem like the Great White Hope. He alienates too many in the far left of the base and doesn’t necessarily excite alot of those in the middle.


    • “but she was 1,000 times as qualified, and 10,000 times as personally appealing.”

      I get why he’d have to say that, and might even believe it, but I see and have seen no evidence that this is remotely even close to true. And that’s not a defense of Trump. If he had said it about Obama, it would seem to be at least a far more credible assertion if still completely subjective. But HRC? 1000 times more qualified? Really? And 10,000 times as personally appealing? It what universe?

      Again, not remotely a defense of Trump.


    • “I’m not denying that racism (against President Barack Obama) and sexism (against Secretary Clinton) played their roles.”

      Again, with the party of facts, where’s the evidence for this? Obama being elected to the presidency twice is proof of racism that spilled over to defeat Trump? And how many Republicans said McCain Palin would have been more appealing if it had been Palin/McCain instead? Sexism was the problem Republicans had with Hillary? Really?

      The problem with Hillary was (a) she’s a Democrat, which Republicans generally don’t approve of and (b) she’s a serious, serious lefty. Which right-wingers don’t approve of. You don’t have to add anything else to that.

      “They’d continually lost market share. But when the bottom fell out and they were forced to ask middle-class taxpayers for a bailout”

      Is that actually what happened? It feels more like the government kind of told them they had to take the bailout, and the attached strings.

      “The answer certainly isn’t socialism. Middle-class voters currently presume that elites already control the government—so why would they want to give the bureaucracy any more power?”

      Can’t argue with him there, however.


    • These folks just wanted something masturbatory to talk about. This is clearly, at this point, going nowhere for them. But they can’t just . . . Like they should.


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