In the short run, the market is too dangerous to mess with so lock em’ if you got em’. Bigger picture, in our opinion, is that we hold between 3.0% and 3.11% and then take a turn for better levels (2.70% or lower) into the fall season.
NAHB Housing Market Index
The NAHB Housing Market Index held steady at 67. It is still high by historical standards, yet at the lowest level since last September. Construction costs continue to cause difficulties for builders and buyers who struggle with affordability. The only region to see improvement was the Northeast which jumped 15 points to 61. The West was unchanged while both the Midwest and the South dipped a couple of points. The softness in this report will be a drag on GDP.
Housing Starts for August saw a rise of +9.2% over July’s negative -5.7%. The gain in August follows some losses in the prior two months. Multi-family starts led the charge, up a whopping +29.3% as all four regions saw gains. Looking at the Permit activity, we see a -5.7% drop, now the weakest print since May 2017, mostly due to a drop of -6.1% in the single-family sector. So, overall, some weaker data when considering the permit side of things, which does suggest some added struggles ahead.
Existing Home Sales
Existing Home Sales for August were unchanged at 5.34mln units, coming in slightly below expectations of a 5.37mln unit print. The headline today ends what was previously a four-straight monthly decline. With existing sales now down -1.5% year-over-year, the regional breakout posted a +7.6% increase in the Northeast, up +2.4% in the Midwest, the South down by -.4%, and the West down -5.9%. The average supply of homes for sale remained unchanged at 4.3 months (up from 4.1 months year-over-year), while the median home price is now $264,800 (up +4.6% year-over-year).