Morning Report: Housing starts disappoint

Posted on April 16, 2024 by Brent Nyitray

Vital Statistics:

Stocks are flattish this morning after yesterday’s bloodbath. Bonds and MBS are down again.

Housing starts came in at 1.32 million in March, which was way below expectations. The number was down 14% month-over-month and 4% year-over-year. Building permits fell 4% MOM and rose 1% YOY to 1.46 million. This will not help alleviate the affordability issue, which is as bad as it was in the 1980s.

I discussed home affordability and compared the last bouts of expensive housing in my latest Substack article. Check it out and please consider subscribing.

Builder sentiment was flat in March, according to the NAHB / Wells Fargo Housing Market Index. High mortgage rates continue to be a headwind for the builders as it is keeping buyers on the sideline, hoping for a decline in borrowing costs.

Note the big builders are helping to alleviate that issue by offering buydowns via their captive mortgage originators. Builders generally pencil in about $40,000 in upgrades for their properties – i.e. things like granite countertops, better appliances etc. For a typical loan, $40k is about 10 points, so you can buy down the rate a lot. Plus it keeps the sales price unchanged which means the comps remain high.

Industrial production rose 0.4% in March, according to the Fed. The latest numbers indicate the manufacturing sector is rebounding after slowing from December through February. On a year-over-year basis production was flat, and generally corresponds to the ISM data along with the Fed surveys.

Bank of America reported first quarter earnings that dropped 8.4% if you strip out a special FDIC charge that most banks took in Q1. Higher deposit costs negatively impacted net interest income. Provisions for credit losses increased 14% QOQ and 40% YOY.

Mortgage origination volume fell 13% compared to the fourth quarter and a year ago. HELOC origination fell as well.

Filed under: Economy |

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38 Responses

  1. Let the mutherfuker burn!, on April 16, 2024 at 12:49 pm said:

    As a woman, I have no agency

    ‘I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself,’ she said.

    https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html

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  3. jnc4p, on April 17, 2024 at 1:55 pm said:

    This is interesting if true:

    A MILITARY SOLUTION TO A POLITICAL PROBLEM

    How the Pentagon engineered a fake war to prevent a real one

    Seymour Hersh
    Apr 17, 2024

    I’ve spent much of my career reporting on the American military’s misdeeds and worse, especially during the Vietnam War, but it’s time now to applaud the brilliance of the Pentagon planning staff and the operational officers who did what America assured Iran’s religious and military leadership it could do: allow Iran to respond to yet another Israeli assassination by flinging more than three hundred drones and missiles toward Israeli targets that as many as possible would be shot out of the sky before hitting ground there. It was a huge gamble, and it paid off.

    The Pentagon was essentially resisting—a word I choose to use—the foreign policy of the Biden White House and NATO by secretly approaching one of Iran’s closest allies—Russia—and persuading a senior general there to reassure Ayatollah Khamenei, Iran’s 84-year-old supreme leader, that America had the know-how to make the strategy succeed.

    Imagine it: two of the Biden administration’s most entrenched enemies—Russia and Iran—trusting and working with the Pentagon and its leadership to prevent a deadly retaliation for yet another Israeli assassination of an Iranian general and six other Iranians in Damascus.

    https://seymourhersh.substack.com/p/a-military-solution-to-a-political

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  4. Let the mutherfuker burn!, on April 17, 2024 at 6:22 pm said:

    Welp, no more impeachment trials.

    At least norms have been maintained.

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    • jnc4p, on April 18, 2024 at 4:53 am said:

      You can still get an impeachment trail if the executive branch and the Senate are controlled by different parties.

      I actually agree with Schumer on the merits on this one. This is a fight over a policy difference. If they want to impeach someone over the border, it should be Biden.

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      • Let the mutherfuker burn!, on April 18, 2024 at 8:48 am said:

        I don’t disagree re the actual responsible party but then, based on your statement, it still would be based on a policy difference wouldn’t it? That’s what elections are for. As far as I’m concerned, Biden should be impeached daily as reciprocity for the Democrats bullshit impeachments but there apparently isn’t the votes. For an actual trial to occur from now on, the House and Senate will have to be controlled by the same party.

        Ultimately it’s theater as this experiment in Republican Democracy has obviously ended.

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    • Brent Nyitray, on April 18, 2024 at 12:05 pm said:

      I think this is just performative. The left is coming to the realization that normies think they are too extreme.

      They will revert to form on November 6

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      • jnc4p, on April 18, 2024 at 12:47 pm said:

        Maybe. It can also be that the CEO of Google Cloud was just fed up with having them occupy his office.

        Also, if they are having to do layoffs anyway, the protesters make themselves an easy target.

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  7. jnc4p, on April 18, 2024 at 11:47 am said:

    This is the new “Downfall” video.

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  8. jnc4p, on April 18, 2024 at 3:41 pm said:

    Kind of crazy how good the writing in magazines like the Atlantic used to be:

    Mick Jagger Shoots Birds

    The Beatles don’t exist anymore. You’ve got to get it through your heads. There’s only us. —Mick Jagger

    By Sara Davidson
    May 1971 Issue

    https://www.theatlantic.com/magazine/archive/1971/05/mick-jagger-shoots-birds/394874/

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  9. Let the mutherfuker burn!, on April 18, 2024 at 6:17 pm said:

    This is what they want and they’re getting it good an hard.

    It’s a pleasure to know this is happening.

    Like

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  10. Let the mutherfuker burn!, on April 19, 2024 at 3:07 pm said:

    So, they’re better trained and equipped than the Afghan army.

    Like

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    • jnc4p, on April 19, 2024 at 3:51 pm said:

      I really wish someone in the press would ask Biden why Ukraine is more important than Afghanistan.

      The pattern since Vietnam is that the US provides aid and/or troops to fight until we get bored and decide we don’t give a shit anymore and leave and then all the horrible consequences we were assured would happen if we hadn’t give the aid and/or troops fail to materialize.

      I was reminded of that when I stumbled across this piece:

      Postcards From a Lost War

      There were addled armchair mercenaries and intrepid millionaires with fruitcake dreams of empire. There were sex-crazed commandantes and the sultry spies who sent them to their deaths. There was a befuddled old Indiana farmer who found himself managing a

      by Glenn Garvin

      February 22, 1990

      …

      Contra home movies, shot in happier days in November 1986, when Casey visited the contra camp at Yamales. “It’s a great privilege for me and my country and President Reagan to stand side by side with you in this struggle,” he shouts from a makeshift reviewing stand. The troops roar back. With the gringos on their side, how can they lose?

      https://chicagoreader.com/news-politics/postcards-from-a-lost-war/

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  11. jnc4p, on April 19, 2024 at 4:11 pm said:

    Good piece on the guy who set himself on fire outside the Trump trial.

    https://sashastone.substack.com/p/max-azzarello-who-set-himself-on

    NoVA, from his manifest:

    “As it turns out, dozens of the writers of The Simpsons went to Harvard. So I asked myself the question: If The Simpsons served the interests of organized crime, how would it do so?”

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  12. Let the mutherfuker burn!, on April 19, 2024 at 6:11 pm said:

    Lol

    It’s funny cause it’s true.

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  14. Let the mutherfuker burn!, on April 22, 2024 at 7:53 am said:

    Considering the current Republican Party, they needn’t worry.

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  15. Let the mutherfuker burn!, on April 22, 2024 at 12:58 pm said:

    I was told this was a conspiracy theory.

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