Morning Report: Housing starts at a 12 year high

Vital Statistics:


Last Change
S&P futures 3200 3.25
Oil (WTI) 60.46 0.14
10 year government bond yield 1.87%
30 year fixed rate mortgage 3.97%


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


Housing starts posted a 12 year high, coming in at 1.365 million units. Building Permits also moved up, rising 11% YOY to 1.485 million units. While 12 year highs seem like something big to cheer, in reality, we are still below our pre-bubble historical averages. Shortages of available homes are still at acute levels, however. This homebuilding cycle has a long way to run, and its positive impact on the economy could be one of the big surprises of 2020.


building permits


Builder confidence is at a 20 year high, according to the NAHB. “Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chief Economist Robert Dietz. “While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability. Higher development costs are hurting affordability and dampening more robust construction growth.”


Echoing this number, Toll Brothers noted on their earnings conference call that traffic and orders were better in the November – mid December period compared to July-October. Impressive indeed, given that this is the seasonally slow period.


Industrial production surprised to the upside, rising 1.1% compared to expectations of a 0.9% increase. Manufacturing production and capacity utilization also rose.


You can get a mortgage for under 1% in many European cities. Unsurprisingly, house prices are rising as a result. According to the NY Times: “Prices jumped at least 30 percent in Frankfurt, Amsterdam, Stockholm, Madrid and other metropolitan hot spots, and are up an average of over 40 percent in Portugal, Luxembourg, Slovakia and Ireland.” Denmark has negative mortgage rates. This is bubble material, and shows how central banks are playing with fire when setting interest rates below zero.

9 Responses

  1. This line from Allahpundit made me laugh.

    In a sense, none of the impeachment polling matters. Obviously way more people will tune into Trump’s Senate trial than watched Schiff’s House hearings, so what goes on in the Senate will likely decide which way public opinion ends up tilting on whether his Ukraine behavior was truly egregious.

    I don’t see why it would. Maybe the first 15 minutes but then anyone who isn’t a partisan diehard will tune out. The Clinton Senate trial was a snoozer as well.


    • Yeah, I don’t see it. I don’t see any more interest in the senate trial than the congressional hearings and, frankly, there never will be. People in their bubbles have learned which websites and talkshows to listen to to get the hi lights they are interested in. None of them are going to sit through the whole thing, and most of them aren’t going to watch any of it in real time. They’ll wait until the news/social media tells them what the standouts were.


  2. Interesting idea from Bloomberg’s campaign manager:

    Political parties should alter the primary schedule to address swing states that they lost in the previous election:

    ““As a party, we’re running a primary to pick a party nominee and Donald Trump is running a general election, and they’re happening in two different places,” Sheekey said. While Democrats are investing in winning the four early contests, Trump is waging a general-election campaign in the six states Sheekey said will decide the 2020 election: Arizona, Wisconsin, Michigan, Pennsylvania, North Carolina and Florida.

    “If we really wanted a primary that would give Democrats an advantage and ultimately, in my view, a winning advantage,” Sheekey explained, “you would restructure the primaries so that the first state would be Wisconsin. Second state would be Michigan, third state would be Pennsylvania, the fourth state would be Florida.” He later remarked that the current Democratic primary system “runs an enormous risk of both ceding all of this year to Donald Trump in places that matter in November, and investing all of our resources in places that don’t.””


    • But typically don’t the state parties want to punish the national party when they do things to the primary schedule that makes them potentially less important?


      • Sure, but the national parties actually have more power if they choose to use it. Assuming a majority go along, they can simply tell any state that holds a primary or caucus on a date other than the one that they were assigned that their delegates won’t be recognized at the conventions.

        Iowa and New Hampshire actually don’t have that much power in the Electoral College.

        Liked by 1 person

  3. See, even feminists want the strong horse.

    “I think they’re just losers,” she says of the male plus-ones. “Or cucked boyfriends. It’s a legal fluke.”

    The article is hilarious.


    • After forcing themselves into the Boy Scouts I don’t have much sympathy


    • Some people want to be a member of a special class with special rights that aren’t afforded to other people. But they go about getting these special rights in ways that they think will only apply to them, but don’t. If you can’t have a Boys Club then you can have a Girl’s Club, either. You don’t want others to control their space you lose control of your space. Simple as that.

      But nobody thinks about what will get taken away from them when they are engaged in taking away from others.


    • “White, meanwhile, says she hopes the company can work out some sort of happy medium.

      “Maybe make it one day a week that men are allowed?” White says. “There has to be a legal way to work this out that still respects the space.””

      It will be amusing to see the results if the ERA is ever ratified.

      Liked by 1 person

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