Rise in building permits a bright spot in housing report

Rise in building permits a bright spot in housing report

Sept. 19:

Housing Starts fell 11.3% in August, driven by a 26.3% drop in multifamily starts and a 4.3% drop in single-family starts. Building Permits, on the other hand, were up 6.9% thanks to a 14.8% jump in multifamily permits, a 2.0% increase in single-family permits, and a 25.5% increase in permits for dwellings with two to four units. Both sets of numbers represent sharp changes, and as usual, building permits may be more indicative of where the market is heading as they are more forward-looking by nature.

State of the market

Bond markets are reacting to an increase in inflation in Canada, the year-over-year increase now at 4.0% for August compared with 3.3% in July. Although driven primarily by a 0.8% annual increase in gasoline prices, the number has spooked markets ahead of the Federal Open Market Committee meeting. Treasury yields were up sharply, but due to intraday volatility, we are not far from where we were Monday morning.

Economic calendar

Wednesday, Sept. 20

  • The FOMC concludes its meeting with a press release at 11:00 a.m. PT and a news conference 30 minutes later.

Thursday, Sept. 21

  • Weekly Initial Jobless Claims
  • Current Account Balance
  • Philadelphia Fed Manufacturing Business Outlook
  • Existing Home Sales
  • Leading Indicators

Friday, Sept. 22

  • S&P Global Flash US Composite PMI

Treasury calendar

Tuesday, Sept. 19

  • $13 billion auction of 20-year Treasury bonds

Thursday, Sept. 21

  • $15 billion auction of 10-year Treasury Inflation-Protected Securities

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking

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