Two Ways to Look at Residential Construction Slowdown

The most common interval for scheduled economic data is "monthly." That means that things like inflation, sentiment, job counts, unemployment, retail sales, and many other economic metrics are updated and released every month, even when nothing very interesting is happening. On that note, there are several regularly scheduled housing related reports. This month's installment of New Residential Construction is today's example and, as you may have guessed, nothing very interesting is happening. At a glance details: Housing Starts (1st phase of actual construction)1.311 million annual pace vs 1.33m forecast, 1.353m previously Building Permits1.416m vs 1.430m forecast, 1.425m previously Neither measurement stands out on a longer term chart. Both have dialed back from the long-term highs seen between late 2020 and early 2022, but both remain in strong territory relative to 2019. This is the first way to view the slowdown in construction. The other way to view the slowdown is to focus solely on the slowdown in greater detail and attempt to connect it to another variable. That ends up being fairly easy if we merely consider the massive rate spike that coincided with the rapid contraction in building permits. In not so many words, construction metrics have been bouncing around their current levels ever since mortgage rates spiked to the 6-8% range. This isn't to say that interest rates are the exclusive reason for the slowdown, but the rate spike coincides with other headwinds. Those include things like affordability, labor costs, machinery/material costs, and financing costs for builders.

November 19, 2024 Download our Mobile App: Download our Mobile App: Housing News Two Ways to Look at Residential Construction Slowdown The most common interval for scheduled economic data is "monthly." That means that things like inflation, sentiment, job counts, unemployment, retail sales, and many other economic metrics are updated and released every month, even when nothing... (read more) Mortgage Rate Watch Mortgage Rates Only Modestly Lower Despite Seemingly Big News Ask your favorite curmudgeonly old market watcher and they'll be happy to explain what "always" happens in financial markets when there's breaking news regarding large scale geopolitical risk. It would be a surprise if you didn't hear a phrase ... (read more) MBS Commentary Threat of Global Nuclear War Barely Worth a Bond Rally Tuesday brings a classic example of a seemingly significant geopolitical headline resulting in a completely underwhelming bond market reaction. When it comes to such matters, we must ask "who thought it seemed significant?" Quit... (read more) Rob Chrisman Jumbo, Non-QM, Milestone, HMDA Review Tools; Disasters and GSE Loans; Interview with Cross Country's Matt Weaver “What do giraffes and zoning regulations have in common? They both don't exist in Texas.” I am not heading there for a while, but instead head to St. Louis this morning for the MBA of St. Louis event. I received this note from a veteran broker. “Some... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.04% -0.04% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.04% -0.04 0.00 15 Yr. Fixed 6.42% -0.03 0.00 30 Yr. FHA 6.38% -0.02 0.00 30 Yr. Jumbo 7.23% -0.02 0.00 7/6 SOFR ARM 7.04% -0.06 0.00 30 Yr. VA 6.40% -0.02 0.00 Updates Daily - Last Update: 11/19 15 Yr. Fixed Rate 6.42% -0.03% Rate Change Points Freddie Mac 30 Yr. Fixed 6.78% -0.01 0.00 15 Yr. Fixed 5.99% -0.01 0.00 Updates Weekly - Last Update: 11/14 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.73% +0.21 0.69 15 Yr. Fixed 6.27% +0.29 0.77 30 Yr. Jumbo 6.77% +0.04 0.49 Updates Weekly - Last Update: 10/30 MBS / Treasuries UMBS 30YR 5.5 98.97 +0.04 Price / Yield Change MBS UMBS 5.5 98.97 +0.04 UMBS 6.0 100.58 +0.01 GNMA 5.5 99.44 +0.18 GNMA 6.0 100.63 +0.12 Pricing as of: 11/19 5:31PM EST 10 Year US Treasury 4.3932 -0.0241 Price / Yield Change US Treasury 2 YR Treasury 4.280 +0.000 5 YR Treasury 4.258 -0.019 7 YR Treasury 4.324 -0.022 10 YR Treasury 4.393 -0.024 30 YR Treasury 4.584 -0.025 Pricing as of: 11/19 5:31PM EST Latest Video Housing starts misses estimates in October Yun: Reducing spending brings down interest rates Building permits data misses estimates in October Homebuilder sentiment improved for the third straight month Around the Web redfin U.S. Home Prices Rose 0.5% in October, Marking a Year of Consistent Growth Eye on Housing Gains for Townhouse Construction Market Watch New-home construction dips in October CNBC Treasury yields fall as investors await data for clues about the economy Reuters Nomura expects Fed to pause rate-cut cycle in December Eye on Housing Residential Mortgages Experience Unchanged Lending Conditions, Weaker Demand in Third Quarter Calculated Risk Blog Housing Starts Decreased to 1.311 million Annual Rate in October Eye on Housing Builder Confidence Moves Higher as Election Uncertainty is Lifted CNBC 10-year Treasury yield ticks up slightly following week of gains Calculated Risk Blog Housing Nov 18th Weekly Update: Inventory Up 0.1% Week-over-week, Up 26.7% Year-over-year CNBC Young adults are holding off on moving out of their parents' house here's what's behind the trend Calculated Risk Blog 3rd Look at Local Housing Markets in October; First Year-over-year Sales Gain Since August 2021 CNBC European markets set for higher open as investors look to shake off negative sentiment

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