Morning Report: Housing starts rise

Posted on October 18, 2023 by Brent Nyitray

Vital Statistics:

Stocks are lower as bonds continue to be for sale. Bonds and MBS are down. We have 5 Fed speakers today, so it will be interesting to see if they address the carnage in the bond market.

Housing starts rose 7% MOM to a seasonally annual adjusted rate of 1.36 million. This is down 7.2% compared to a year ago. Building Permits fell 4.4% MOM and 7.2% YOY to a seasonally adjusted annual rate of 1.54 million.

Mortgage Applications fell 6.9% last week as purchases fell 6% and refis fell 10%. Note that last week was short due to the Columbus Day Holiday. “Applications decreased to their lowest level since 1995, as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.70 percent – the highest level since November 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both purchase and refinance applications declined, driven by larger drops for conventional applications. Purchase applications were 21 percent lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory. The ARM share was 9.3 percent, the highest share in 11 months, as some borrowers look for alternative ways to lower their monthly payments. Refinance activity was at its lowest level since early 2023. There is very limited refinance incentive with mortgage rates at multi-decade highs.”  

A homebuyer must earn at least $115,000 to afford the median home, according to Redfin. This is up 15% compared to a year ago. Wage growth has been around 5% over the past year, so the affordability issue is brutal. The typical mortgage payment is $2,866 which is an all-time high.

“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments. But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates–and that’s propping up prices,” said Redfin Economics Research Lead Chen Zhao. “Buyers–particularly first-timers–who are committed to getting into a home now should think outside the box. Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb.”

Philly Fed President Patrick Harker is ready to stop the interest rate hikes. “This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months.” On the subject of rate cuts, he said: “We’re not there yet, but we believe in lags,” he said. “So if we get into the range of, I don’t know, let’s call it 2.5%, [and] we’re continuing to move down, then something like that would at least have me considering whether or not it’s time for rates to start coming down.”

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44 Responses

  3. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on October 18, 2023 at 5:41 pm said:

    I read this piece and immediately thought that this person is a woman.

    The official initially felt unable to highlight concerns about the consequences for Palestinians in policy discussions.

    “It took me till Wednesday or Thursday to have the courage to say, ‘I don’t think it would be good for America if we are seen as responsible for killing Palestinian children,’” they said. “There was awkward silence like a pin could drop, and I’m like, ‘Are they going to report me to the House Un-American Activities Committee?’”

    Maybe you should worry more about your inability to have the courage to speak your mind and have some serious consideration of your ability to be effective for the American people if you are a coward about your job. If it’s to express your thinking and you’re to scared to maybe this isn’t the job for you?

    The period since the Hamas attack represents “the first time in the administration that there was a real culture of silence,” one official said. “It feels like post-9/11 where you feel like your thoughts are being policed, and you’re really afraid of being seen as anti-American or an anti-Semite.”

    I’ll say it again, only women are requiring this.

    “But with many Biden staffers already deeply demoralized, that outreach could be perceived as window dressing if there’s little proof it creates a more inclusive decision-making process,” the report mentions, after including a statement from a White House spokesperson.

    HuffPo mentioned that White House Chief of Staff Jeff Zients will hold a “listening session with Muslim, Arab, and Palestinian staff to hear from them directly.”

    Lol

    Calling the period [of time after the October 7 attack] “disillusioning,” the person who works in the administration said: “There is a sense that the administration’s policy decisions show stunning disregard for innocent Palestinians ― and that same dehumanization is also reflected in how staff are being treated.”
    “It’s jarring for people because there is so much care for some lives, both abroad and in terms of thinking about how certain staff must be feeling,” the person continued.

    Holy shit! I didn’t know that the “Inter-Agency” is having trouble! God, we’re fucked!!!

    https://townhall.com/tipsheet/rebeccadowns/2023/10/18/biden-staffer-email-on-israel-hamas-n2630006

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    • Brent Nyitray's avatar
      Brent Nyitray, on October 18, 2023 at 6:41 pm said:

      Wonder what Harry Truman would have thought if he had people like that on his staff.

      Clearly female too. No normal dudes talk like that.

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      • lmsinca's avatar
        lmsinca, on October 18, 2023 at 9:22 pm said:

        As usual you guys miss the point. Biden clearly stated support for Israel to protect their citizens and state and also recognized the humanitarian issue in Gaza. Maybe only “females” can hold two opposing interests to be true at the same time………………..and democrats too??? Walking and chewing gum at the same time might just be a “THING”

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        • Brent Nyitray's avatar
          Brent Nyitray, on October 18, 2023 at 9:29 pm said:

          you missed the point.

          “But with many Biden staffers already deeply demoralized, that outreach could be perceived as window dressing if there’s little proof it creates a more inclusive decision-making process,

          Normal people don’t talk like that.

          Like

        • ScottC's avatar
          ScottC, on October 19, 2023 at 6:52 am said:

          lms:

          Maybe only “females” can hold two opposing interests to be true at the same time

          “Interests” aren’t true or false. They either exist or they do not. And clearly opposing interests can and do exist. That isn’t an insight at all, much less a female one.

          However, you might be on to something with the suggestion that Democrats tend to think like females.

          Like

        • ScottC's avatar
          ScottC, on October 19, 2023 at 7:21 am said:

          lms:

          As usual you guys miss the point. Biden clearly stated support for Israel to protect their citizens and state and also recognized the humanitarian issue in Gaza.

          Did you even read the article in question? The whole thing was giving voice to staffers who are complaining that the Biden admin is solely focused on Israel’s interests and isn’t at all concerned about the humanitarian issue is Gaza.

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        • ScottC's avatar
          ScottC, on October 19, 2023 at 7:26 am said:

          BTW, lms, apropos of nothing at all, did you know that abortion is outlawed by the Palestinians in both Gaza and the West Bank?

          Like

        • Let the mutherfuker burn!'s avatar
          Let the mutherfuker burn!, on October 19, 2023 at 7:28 am said:

          Welcome back!

          Nailed it as usual. The White House should be staffed with people to afraid to speak their mind.

          Like

        • jnc4p's avatar
          jnc4p, on October 19, 2023 at 10:37 am said:

          “lmsinca, on October 18, 2023 at 9:22 pm said:

          As usual you guys miss the point.”

          This was the closing point in the article:

          “Current conditions are forcing “a reckoning moment,” the person in the administration said.

          “There’s a deep, deep sorrow and pain for people as they’re seeing the death count rapidly mount and a panicked and alarmed sense of, ‘How are we allowing this to happen?’” they continued. “The pride I felt serving in President Biden’s administration has given way to deep shame. May God forgive us.”

          https://www.huffpost.com/entry/biden-administration-gaza-dissent_n_652f42b0e4b0da897ab5c8a6

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        • Brent Nyitray's avatar
          Brent Nyitray, on October 19, 2023 at 3:37 pm said:

          Scott:

          However, you might be on to something with the suggestion that Democrats tend to think like females.

          I agree. The democrat party is the feminine party and has the interest of women as its North Star. No such party exists for men. But supposedly we live in a patriarchy. Go figure.

          Like

    • jnc4p's avatar
      jnc4p, on October 19, 2023 at 10:32 am said:

      “I’ll say it again, only women are requiring this”

      I think it’s generational as well. I can see some Gen Z males having the same attitude. To me, this was more telling:

      “A career civil servant described tension between their commitment to challenging rights abuses and their job.

      “I’m trying to educate people about Palestine through social media, but I’m worried I’ll lose my security clearance for criticizing the president or blaming the U.S. for civilian massacre,” they told HuffPost. “I feel like there’s no place for me in America anymore, and I’m on thin ice with my clearance because of my heritage and because I care about my people dying.”

      https://www.huffpost.com/entry/biden-administration-gaza-dissent_n_652f42b0e4b0da897ab5c8a6

      Maybe you should not post on social media if it conflicts with your job?

      This is the first time many of them have ever faced professional blowback for their BS.

      Things are shifting. Relatedly, this was long overdue:

      “U.K. charges Greta Thunberg as governments crack down on climate protests

      By Karla Adam
      October 18, 2023 at 12:49 p.m. EDT”

      https://www.washingtonpost.com/world/2023/10/18/greta-thunberg-charged-uk/

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      • Brent Nyitray's avatar
        Brent Nyitray, on October 19, 2023 at 10:40 am said:

        I would say Gen Z boys have been raised and educated as if they were defective girls. So it isn’t surprising many sound like chicks.

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    • jnc4p's avatar
      jnc4p, on October 19, 2023 at 11:01 am said:

      “Holy shit! I didn’t know that the “Inter-Agency” is having trouble! God, we’re fucked!!!”

      Some people have started to figure out it was always BS.

      ““One reason to want a diverse staff is to have a variety of inputs into your decision-making, not just to check a box on a little quota sheet — you want to benefit from the more informed decision-making that happens from a broader set of experiences having a seat at the table,” a person in the administration told HuffPost. “The inner, inner circle on these issues is not at all diverse. Does that completely explain the monstrous disregard for innocent Palestinian lives? No, but it’s hard to think these things are entirely disconnected.””

      It was always about checking a box.

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      • Brent Nyitray's avatar
        Brent Nyitray, on October 19, 2023 at 11:06 am said:

        Diversity to the left means nothing more than a bunch of different – looking people who have exactly the same Hive Mind point of view.

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    • jnc4p's avatar
      jnc4p, on October 19, 2023 at 12:16 pm said:

      An alternative, old school approach to dissenting from administration policy instead of anonymous complaining to Huffington Post:

      “State Dept. official resigns, citing objection to Israel arms transfers

      Josh Paul’s exit marks a rare public show of internal dissent from the Biden administration’s robust support for its closest ally in the Middle East

      By Michael Birnbaum
      October 18, 2023 at 9:59 p.m. EDT”

      https://www.washingtonpost.com/national-security/2023/10/18/state-department-josh-paul-resignation-israel/

      His resignation letter is worth reading:

      https://www.linkedin.com/feed/update/urn:li:activity:7120512510645952512/

      I don’t agree with him, but unlike the people cited in the Huff Post piece, I respect him.

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      • ScottC's avatar
        ScottC, on October 19, 2023 at 4:02 pm said:

        jnc:

        I don’t agree with him, but unlike the people cited in the Huff Post piece, I respect him.

        I would have more respect for him if, in the process of condemning Israel’s response, he offered an alternative. I think people who condemn Hamas’s action but then in the same breath blame Israel’s response for the resulting civilian deaths in Gaza without identifying a response that they would find morally acceptable are nothing more than immature, unthinking children, driven by emotion and not rational thought. (Or, in other words, typical progressives.)

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  4. lmsinca's avatar
    lmsinca, on October 18, 2023 at 9:05 pm said:

    Just checking in because I seem to be unable to comment these days!

    Like

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  5. jnc4p's avatar
    jnc4p, on October 19, 2023 at 10:39 am said:

    Some Democratic strategists see an opportunity to clean house:

    “Time to Throw the Intersectional Left Under the Bus!
    This is a golden opportunity for the Democrats.

    Ruy Teixeira
    Oct 19, 2023”

    https://www.liberalpatriot.com/p/time-to-throw-the-intersectional

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  6. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on October 19, 2023 at 10:55 am said:

    Lol

    They never fail to get what they want – Hello Omnibus! Hello Billions more for DoD contractors, er, Ukraine!

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  7. jnc4p's avatar
    jnc4p, on October 19, 2023 at 11:27 am said:

    The MSM lying never stops:

    “The initial New York Times story about the “Israeli strike” was accompanied by a photo of a severely damaged building which one could reasonably presume to be the hospital after the strike; in fact, it’s not only an entirely different building but one located, as the text on the photo reveals, in a different city (Khan Younis, about fifteen miles away).”

    https://plus.thebulwark.com/p/rush-to-judgment-and-bias-on-gaza-hospital-story

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    • Brent Nyitray's avatar
      Brent Nyitray, on October 19, 2023 at 11:28 am said:

      That is why I am skeptical of the democrats ditching the intersectional left – the MSM will just gaslight people that it never existed, and the Hive Mind will buy it.

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  8. jnc4p's avatar
    jnc4p, on October 19, 2023 at 1:35 pm said:

    Somebody figured things out:

    “U.S. eases sanctions on Venezuelan oil after Maduro agrees to elections

    By Karen DeYoung and Ana Vanessa Herrero
    October 18, 2023 at 9:51 p.m. EDT”

    https://www.washingtonpost.com/world/2023/10/18/biden-eases-venezuela-oil-sanctions/

    “U.S. starts deportation flights to Venezuela, aiming to curb migration

    By Nick Miroff
    Updated October 18, 2023 at 6:09 p.m. EDT”

    https://www.washingtonpost.com/immigration/2023/10/18/ice-migrants-venezuela-repatriation/

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  9. lmsinca's avatar
    lmsinca, on October 19, 2023 at 8:42 pm said:

    I don’t have time tonight to read all of your comments but perhaps I was unclear or maybe you guys were unclear?

    I support Israel and at the same time I support the right to life of the Palestinian people to have their own state…………..Hamas doesn’t support the people living in GAZA, they are expendable to them. I think Biden has taken the perfect diplomatic position and is also able to hold conflicting sympathies for both sides of the war. He seems to be beloved in Israel but also managed to open humanitarian aid from Egypt to the victims of Hamas in GAZA.

    And Scott………..

    BTW, lms, apropos of nothing at all, did you know that abortion is outlawed by the Palestinians in both Gaza and the West Bank?

    Looks like the Palestinians have a lot in common with Republicans then………..congratulations for pointing that out…………….

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    • ScottC's avatar
      ScottC, on October 19, 2023 at 9:28 pm said:

      lms:

      I don’t have time tonight to read all of your comments

      Understandable. It took me all of 5 minutes to read them all. I’m exhausted!!!!

      Looks like the Palestinians have a lot in common with Republicans then

      Well, one thing, anyway. (Is there something wrong with having something in common with Palestinians?)

      I raised it only out of curiosity about what you think of this Palestinian War on Women.

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    • ScottC's avatar
      ScottC, on October 19, 2023 at 9:38 pm said:

      lms:

      I support Israel and at the same time I support the right to life of the Palestinian people to have their own state

      What does that mean, “I support Israel”? You support them in what way, and to do what exactly?

      As regards the Palestinians right to have their own state, you are aware that Gaza has been governed by Palestinians since 2006, are you not? Are you in favor of a Palestinian state governed by Palestinians dedicated to the annihilation of Israel and all the Jews in it?

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