I hate to rain on anybody's parade -- but the news media sources that are breathlessly reporting that housing starts have soared 1.6% to their highest levels since November 2008 - are, in my opinion, leaving out an important part of the story. The entire surge in the housing starts number was generated by an 18.8% advance in the pace of multi-family construction - while groundbreaking for single-family homes actually dropped 0.9%. March building permits, which give a sense of future home construction, jumped 7.5% higher last month. I don't have immediately available the breakdown of structure type (single family/multi-family) for this particular metric but I strongly suspect multi-family permits make up the majority of this number as well.
There is no avoiding the "hand and glove" connection between the direct dependency new home construction has with job creation. Until the labor sector shows an extended period of sustained growth the total number of new homes under construction will likely remain stuck very near its all-time low of 489,000 units - which it set last month
I continued to strongly believe the near-term trend trajectory of mortgage interest rates is now completely dependent on trading action in the stock markets. In order to move to yet lower levels -- mortgage interest rates will be almost entirely dependent on a boost from events -- rather than anything on the balance of this month's economic calendar.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment