Morning Report: Housing starts disappoint

Vital Statistics:

  Last Change
S&P futures 4,521 10.2
Oil (WTI) 82.13 -0.89
10 year government bond yield   1.64%
30 year fixed rate mortgage   3.22%

Stocks are higher this morning as the numbers out of the banks continue to be strong. Bonds and MBS are down.


Housing starts rose 7.4% YOY to 1.55 million, according to Census. Building Permits were flat YOY at 1.59 million. To put the housing starts number into perspective, we are at the same level we were in 1959, when the government first started keeping track. Mind you, the US population has increased by something like 85% since then.

The NAHB Housing Market index improved in September. Homebuilder sentiment has been strong for the past several years as tight inventory conditions give them pricing power.

Separately, mortgage applications for a new home fell 16.2% in September, according to the MBA. “New home sales purchase activity was weaker in September, and the average loan size rose to another record high, as homebuilders continue to grapple with rising building materials costs and labor shortages. The survey-high average loan size of $408,522 is evidence of higher sales prices from these higher costs, as well as the shift in new construction to larger, more expensive homes,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The estimated pace of new home sales decreased 3.5 percent last month after a strong August reading, but the two-month sales pace is at its strongest since January 2021.”


Mortgage applications fell 6.3% last week as refinances fell 7% and purchases fell 5%. “Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021. The 30-year fixed rate has increased 20 basis points over the past month and reached 3.23 percent last week – the highest since April 2021. The 15-year fixed rate increased to 2.54 percent, which is the highest since July,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase activity declined and was 12 percent lower than a year ago, within the annual comparison range that it has been over the past six weeks. Insufficient housing supply and elevated home-price growth continue to limit options for would-be buyers.”  


Demand for second homes jumped during the pandemic, according to Redfin. This was probably due to rapidly falling rates and a desire for people to leave crowded urban areas. The decline after March 2021 corresponds with the temporary limits on second homes and investor loans from the GSEs and it looks like demand is back on the upswing.




8 Responses

    • Because trans rights trump racism on the woke hierarchy of oppression. Which was exactly Chapelle’s point in both of his recent specials.

      On the other hand, live by allyship, die by allyship.

      “Sarandos argued that remote working doesn’t allow staffers to feel the true support Netflix has for the LGBTQ+ community, saying, “reinforcement of the allyship that the company has towards the LGBTQ+ community, including massive investment in content and creators and storytellers to represent LGBTQ+ stories.””

      Good piece on it:


    • He made an anti-Zionist joke about jews from Space that went over well enough, although some on the more Zionist right have complained. But nobody I heard observed that it could have well been intentional to make a Jewish joke and make a trans joke in the same set.

      It seems illustrative. And I think that might have been intentional.


      • Some people literally blocked that out:


Be kind, show respect, and all will be right with the world.

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