In this morning’s data, Housing Starts were much less than expected at 1,283,000 in August, which is a -11.3% decrease from the previous month. This figure has fallen well below the 1,427,000 level late in 2022. Building Permits were much higher than expected at 1,543,000 in August, which is an increase of 6.9% from the previous month. This figure is higher than the 1,342,000 level from late last year.
Overall, a drop in starts and a rise in permits in August. Reduced sentiment and weather conditions likely impacted the willingness of homebuilders to start new projects in the month. With starts falling well below the level seen in late 2022, it hints that policy tightening by the Federal Reserve is having some impact. However, building permits rose at the same time, suggesting projects on existing homes increased. Higher rates on mortgages are keeping many individuals in their current homes. While only 4% of GDP, the impacts of housing seep into other areas of the broader economy. Given rates may stay higher for longer to ensure inflation moves down closer to the Federal Reserve’s goal, how well housing data holds up will be a key dynamic for the economy in the months ahead.
In all, the 10-year US Treasury yield is higher and equity futures are slightly lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.