In this morning’s data, Housing Starts were 1,559,000 in June, less than expected and a -2.0% decrease increase from the previous month when an increase was expected. In addition, Building Permits were 1,685,000 in June, a bit higher than expected but still a decrease of -0.6% for the month. Overall, both housing starts and building permits fall slightly in June, but that follows large declines from the previous month, indicating a slowing housing market. Rising interest rates are impacting demand and builders are likely pushing to complete their current projects to recognize revenue, rather than start fresh with new ventures. Even so, additional housing capacity is still needed, especially for first time home buyers, given limited building in previous years. While the Federal Reserve remains steadfast in tightening policy to fight inflation, the strength of the housing market will be key to watch in the months ahead given its activities filter into many parts of the economy. In all, the 10-year US Treasury yield ticks higher and equity futures are also higher as we head into the market open.
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