Morning Report: Building Permits up big

Vital Statistics:


Last Change
S&P futures 3128 6.25
Oil (WTI) 56.29 -0.74
10 year government bond yield 1.81%
30 year fixed rate mortgage 3.94%


Stocks are higher this morning on no real news. Bonds and MBS are flat


Housing starts came in a little light, at 1.31 million but the big news was the permits number, which rose to 1.46 million. This is up almost 15% compared to October 2018 and is the highest print since the bubble years. The action was in the Northeast and the South. Completions were up big as well, coming in at 1.26 million, which is up double digits compared to last month and a year ago.


building permits


The MBA reported that applications for new home purchases increased by 9% from September and by 31.5% from a year ago. “The new home sales market continues to be strong and was reinforced by October’s increase in applications for new home purchases,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “At an annual pace of 791,000 units, our estimate of new sales has reached its highest level since the inception of our survey in 2012. Home builder sentiment remains close to 18-month highs, and housing starts and permits have increased for four straight months. These are promising signs for the housing market, as the rise in new and existing housing supply has led to slower home-price growth and improving affordability.”


While a couple data points don’t necessarily indicate a trend yet, we might finally start seeing new home construction begin to meet the pent-up demand out there. And if this is finally happening, GDP forecasts are probably too low.


The Home Despot reported disappointing third quarter earnings and lowered FY 2019 guidance. Comp store sales were up, but tariffs are taking a bite out of earnings. The stock is down 5% pre-open.


Home prices rose 5.4% in October, according to Redfin. “Low mortgage rates are propping up homebuyer demand and juicing prices, said Redfin chief economist Daryl Fairweather. “However, home sales have been slow to grow since there are so few homes for sale and not many new listings hitting the market, especially affordable ones. The market is split: It’s a seller’s market for moderately priced homes, but a buyer’s market for pricier homes.” 



10 Responses

  1. “Many voters inevitably presume today that redistribution of wealth is the Democratic Party’s animating creed.”

    They’re not wrong Rahm. You guys worked long and hard to get that reputation, enjoy it.


    • Since the New Deal, Democrats have thrived when championing ideas moored in the belief that rights come with responsibilities and that benefits are earned through work.

      That doesn’t feel correct. Also, I don’t see anything about Medicare for All or the Green New Deal that isn’t loaded with onerous and compulsory work and behavior changes on the part of the American public–which is what I assume that “responsibilities” means in the context.

      Amid all the talk about programs designed to redistribute America’s wealth, the phrase most glaringly absent from the 2020 campaign to this point is “inclusive growth.”

      I don’t feel like “inclusive growth” is the exciting concept that voters are looking to hear about. They want “America First” or “Free Stuff!”

      And much as I agree that concentrated power is a threat to American prosperity, I believe a universal basic income runs counter to America’s deep-seated belief that people should earn their living by working hard and playing by the rules.

      Eh, I’m all for a Universal Basic Income. And Free Healthcare. And all sorts of other free stuff. Once technology make them possible. In 100 years? I’ll be all in.

      As power and money have flowed away from the working and middle classes —

      This can only be said be people who judge that relative to others. Almost everybody has more personal power and purchasing power now than their parents and certainly their grandparents and great-grandparents. It’s just that there are some people with much, much more. And much larger upper-middle and lower-upper class strata. So there’s more stuff available that middle class people, living perfectly fine lives, still can’t afford that nearby neighbors can, and it’s just not fair.

      Social Security and Medicare aren’t handouts;

      While true, they are mandatory confiscations of income for which there is no opt out, and for which there are precious few benefits to be left to your children or others should you make it to 65 and drop dead.

      Second, if you want to help America’s middle class (and those trying to enter the middle class)

      I feel like the far left in this country hates the bourgeoisie middle class and want to help them primarily into the work camps where they will live a utopian life of subsistence and glorious labor to the state.

      President Trump’s reelection hopes hinge on his ability to scare suburban voters, a key constituency within our Metropolitan Majority, into believing they can’t trust Democrats with their hard-earned money.

      While this is kind of his point, it’s not Trump scaring anybody that the Democrats want to take your money (and your guns, and most other stuff)–that’s the Democrats.

      Let’s not be politically short-sighted or give Republicans opportunities to frame us as irresponsible tax-and-spenders by championing, for example, proposals to give free health care to new undocumented immigrants.

      And that’s all the evidence they’ll need to accuse Emmanuel of being on Trump’s payroll. Or a racists. Or both, probably.

      I’m guessing Emmanuel is prepping his own presidential run in 2024, getting out his message early so he can say “I told you so” when the Democrats lose against Trump again.


    • the funny thing is that the comments in the article completely support that view..

      Liked by 1 person

  2. I ran across this a few weeks ago (maybe I quoted it then? I don’t remember) but have been interested in reading up, after the article JNC4P pointed us at, on WaPo’s opposition to Deval Patrick and Michael Bloomberg:

    Before we go further, I should note that for years I have angrily condemned (with little apparent effect) the phenomenon of rich businesspeople running for elected office by saying “I’m a businessman, not a politician,” as though their lack of relevant experience is what qualifies them for the job.

    Given how the economy is doing–and how almost everything is doing–what makes having political experience that relevant? If you subtracted the entertainment-media complex’s daily vapors and sky-is-falling about everything, it seems we’re in an unprecedented moment of peace and prosperity. If nothing else, it indicates that politicians with experience don’t do a better a job as president, and arguably do a worse job. If you like a erudite, European-style globalist/quasi-socialist president–Obama did a great job, and with not a lot of governing experience. Dubya had a lot more governing experience, and I was not impressed.

    Admittedly, my favorite president–Ronaldus Magnus–had more previous government experience that many presidents, but (a) it really didn’t earn him any love and respect on the left, and none of them were saying “I hate him, but he’s doing a really good job governing thanks to all that experience he’s had” … but I still don’t see this reverence for previous government experience as a resume enhancer for presidents.

    Also, Bloomberg was frackin’ mayor of New York. He’s have more governing experience than Trump or, arguably, Obama (at least, than Obama had when elected).

    I just don’t get the whole “we need an experienced politician in the presidency” . . . or any political office. Some experience probably helps productivity, but otherwise, why? It ain’t brain surgery, and, frankly, I think doing it well is more luck and art and magic than science.


  3. Another observation: Jen Rubin has gone full hard left. I gotta wonder how that works. I mean, I get Jonah Goldberg not liking Trump and getting bored with the GOP (I, myself, not a big fan of the GOP). I get Bill Kristol moving leftwards and turning kind of Democrat because he’s always been a neocon, and it’s all about which side is mostly likely to make the most foreign wars.

    But Jen Rubin’s just gone: well, everything I used to think, I now disagree with, and I now think an entirely new set of things, because Trump! At least she doesn’t have any kind of “From the Right” in her byline any more.


  4. Interesting framing the Democratic counsel has for the question.

    Isn’t “Official U.S. Policy, as it regards foreign policy, literally whatever the President says it is at the given moment?


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