Pre-market futures are up this Friday morning, in what has been a strong week for bullish investors off late-October lows. The Dow is +100 points at this hour, the S&P 500 is +10, and the small-cap Russell 2000 is +15. Only the tech-heavy Nasdaq — by far the index leader year-to-date — is down -5 points in early trading hours. The past five trading days helped put even the Russell and the Dow back into the green year to date — from +2.4% (Nasdaq) to +5.6% (Russell).
Though the main indices have been risk-on and risk-off generally aligned with one another through 10 1/2 months of 2023, bottoms have been set in for each at different points: the Russell fell to its lowest levels the week before Halloween, while the Dow and S&P saw their year-to-date nadirs in the second week of March. Only the Nasdaq, which is +45% from the first of the year, put in its lows in early January.
Housing Starts for October grew +1.9% to 1.372 million seasonally adjusted, annualized units — the highest print in three months, but well off the 1.583 million new starts we saw back in May of this year. (By August, new starts had fallen precipitously to 1.305 million, the lows of the cycle.) Keep in mind, last month we saw mortgage rates around 7.5% and inching ever higher; that the headline number here is as strong as it is speaks to relative strength in the housing market.
Building Permits — a proxy for future housing starts — were actually much stronger in October, reaching 1.487 million, +1.1% month over month. The highs for the cycle came in August (interestingly, the same month new starts plummeted) at 1.541 million, but the drop-off since then has not been severe. Again, these are pretty healthy numbers for a market with the highest mortgage rates since before the Great Recession. Many analysts had surmised aspects of the housing market would have cooled faster than these figures indicate.
November starts & permits data should be interesting, as mortgage rates have begun to ebb a bit — now closer to 7% than 8%. Single-family housing construction was flat while multi-family continued to lead, but considering the level of demand of single-family housing (with less supply than normal due to existing homeowners happy with their 3% mortgage rate on their 30-year fixed), we might expect strength on these metrics next month, as well.
With other economic data swooping lower this week — particularly CPI and PPI data — the cause for celebration is the near-certainty that we are at the highest levels of interest rates we’re expected to see; the cause for concern is that if economic reports come down faster than expected across the board, this could lead us into that recession we’d been worried about for a year or so. But good housing data will keep things more buoyant, so we’ll gladly accept them.
Questions or comments about this article and/or author? Click here>>
Image: Bigstock
Housing Data Stronger for October; Pre-Markets Mixed
Pre-market futures are up this Friday morning, in what has been a strong week for bullish investors off late-October lows. The Dow is +100 points at this hour, the S&P 500 is +10, and the small-cap Russell 2000 is +15. Only the tech-heavy Nasdaq — by far the index leader year-to-date — is down -5 points in early trading hours. The past five trading days helped put even the Russell and the Dow back into the green year to date — from +2.4% (Nasdaq) to +5.6% (Russell).
Though the main indices have been risk-on and risk-off generally aligned with one another through 10 1/2 months of 2023, bottoms have been set in for each at different points: the Russell fell to its lowest levels the week before Halloween, while the Dow and S&P saw their year-to-date nadirs in the second week of March. Only the Nasdaq, which is +45% from the first of the year, put in its lows in early January.
Housing Starts for October grew +1.9% to 1.372 million seasonally adjusted, annualized units — the highest print in three months, but well off the 1.583 million new starts we saw back in May of this year. (By August, new starts had fallen precipitously to 1.305 million, the lows of the cycle.) Keep in mind, last month we saw mortgage rates around 7.5% and inching ever higher; that the headline number here is as strong as it is speaks to relative strength in the housing market.
Building Permits — a proxy for future housing starts — were actually much stronger in October, reaching 1.487 million, +1.1% month over month. The highs for the cycle came in August (interestingly, the same month new starts plummeted) at 1.541 million, but the drop-off since then has not been severe. Again, these are pretty healthy numbers for a market with the highest mortgage rates since before the Great Recession. Many analysts had surmised aspects of the housing market would have cooled faster than these figures indicate.
November starts & permits data should be interesting, as mortgage rates have begun to ebb a bit — now closer to 7% than 8%. Single-family housing construction was flat while multi-family continued to lead, but considering the level of demand of single-family housing (with less supply than normal due to existing homeowners happy with their 3% mortgage rate on their 30-year fixed), we might expect strength on these metrics next month, as well.
With other economic data swooping lower this week — particularly CPI and PPI data — the cause for celebration is the near-certainty that we are at the highest levels of interest rates we’re expected to see; the cause for concern is that if economic reports come down faster than expected across the board, this could lead us into that recession we’d been worried about for a year or so. But good housing data will keep things more buoyant, so we’ll gladly accept them.
Questions or comments about this article and/or author? Click here>>