“Don’t rain on my parade.” Barbra Streisand. Housing Starts were on the move higher in August, but the news on future construction was a bit of a damper.
August Housing Starts rose 9.2 percent from July to a seasonally adjusted annual rate of 1.282 million units, above the 1.229 million expected. Single-family starts, which make up the largest share of the residential housing market, were up 1.9 percent while multi-family starts surged 27.3 percent. Housing Starts were flat in the Northeast, but the Midwest, South and West all saw positive gains. Housing Starts were also 9.4 percent higher than August of last year.
Building Permits, a sign of future construction, didn’t fare as well, an unfortunate development for would-be buyers struggling with limited inventory in many areas of the country. From July to August, Building Permits decreased 5.7 percent. They are also 5.5 percent lower than August 2017.
Existing Home Sales managed to stabilize in August after four straight months of declines, the National Association of REALTORS® reported. Existing Home Sales were unchanged in August from July at an annual rate of 5.34 million units, below the 5.37 million expected. Flat sales were due to a balance of gains in the Northeast and Midwest and losses in the South and West. Unsold inventory of existing homes was at a 4.3-month supply, still well below the 6-month supply considered normal. Sales were also down 1.5 percent when compared to August 2017.
Mortgage Bonds have struggled in the latest week due in part to positive gains in Stocks. Home loan rates have ticked higher but remain attractive.
The Fed meeting could take center stage amidst a full week of economic reports.
- Consumer Confidence kicks off the week on Tuesday followed by the Consumer Sentiment Index on Friday.
- In housing news, the S&P/Case-Shiller Home Price Index will be delivered on Tuesday, New Home Sales Wednesday and Pending Home Sales Thursday.
- Also on Wednesday, the Fed’s two-day Federal Open Market Committee meetingculminates with the monetary policy statement.
- Weekly Initial Jobless Claims will be released as usual on Thursday along with Gross Domestic Product and Durable Goods Orders.
- On Friday, look for Personal Consumption Expenditures, Personal Income and Personal Spending.
If you or someone you know has questions about home loans, give me a call. I’d be happy to help.