Two-fer Tuesday: A dastardly duo of downbeat housing data
SPY•U.S. housing starts fell 5.2% in September to a 1.221 million-unit annual rate, while pending home sales dropped 7.3%. Building permits slipped 0.2% to a 1.400 million-unit rate.
1. Housing starts fall
U.S. housing starts fell 5.2% in September to a seasonally adjusted annual rate of 1.221 million units, 6.4% below analysts’ expectations. August’s decline was revised to 5.9%; single-family starts fell 4.6% and multiple-unit starts dropped 6.7%.
2. Permits and sales weaken
Building permits edged down 0.2% to a 1.400 million-unit annual rate, 0.4% above consensus. Single-family permits fell 4.0%, while permits for multiple-unit projects rose 6.1%. Signed contracts for pending sales of existing homes fell 7.3% in September, compared with economists’ forecast for a 0.5% decline.
3. Markets and mortgage rates
U.S. indexes rallied, with the Dow up about 1%; healthcare led S&P 500 sector gains and energy was the biggest laggard. The 10-year Treasury yield dipped to about 5.11%. Nationwide economist Ben Ayers said builders are pulling back as higher mortgage rates weaken demand, while NAR chief economist Lawrence Yun said September market conditions weakened as rates rose.
