Opinions Uncensored

FOMC Minutes: Balance Sheet Normalization "Relatively soon"

From the Fed: Minutes of the Federal Open Market Committee, July 25-26, 2017. Excerpts: Participants also discussed the appropriate time to implement the plan for reducing the Federal Reserve's securities holdings that was announced in June in the Committee's postmeeting statement and its...

Comments on July Housing Starts

Earlier: Housing Starts decreased to 1.155 Million Annual Rate in July
The housing starts report released this morning showed starts were down 4.8% in July compared to June, and were down 5.6% year-over-year compared to July 2016. This was a weak report and was below the consensus forecast. Note that multi-family starts are volatile month-to-month, and has seen wild swings over the last year. This first graph shows the month to month comparison between 2016 (blue) and 2017 (red). Starts were down 4.8% in July 2017 compared to July 2016, and starts are up only 2.4% year-to-date. Note that single family starts are up 8.6% year-to-date, and the weakness (as expected) has been in multi-family starts. My guess is starts will increase around 3% to 7% in 2017. Below is an update to the graph...

Housing Starts decreased to 1.155 Million Annual Rate in July

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000. This is 4.8 percent below the revised June estimate of 1,213,000 and is 5.6 percent below the July 2016 rate of 1,223,000. Single-family housing starts in July were at a rate of 856,000; this is 0.5 percent below the revised June figure of 860,000. The July rate for units in buildings with five units or more was 287,000.

Building Permits:
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent below...

MBA: Mortgage Applications Increase Slightly in Latest Weekly Survey

From the MBA: Mortgage Applications Slightly Increase in Latest MBA Weekly Survey

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 11, 2017.

... The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 10 percent higher than the same week one year ago. ...

The average contract interest rate for 30-year fixed-rate mortgages with conforming...

Wednesday: Housing Starts, FOMC Minutes

Two notes from Tim Duy at Fed Watch. First a few excerpts from: Retail Sales, Dudley, Wages[Duy write] 5.) But - and I think this is important - financial conditions continue to easy despite rate hikes: [Dudley said] Now the reason why I think you’d want to continue to gradually remove...

Earlier for the NY Fed: Manufacturing Activity "grew strongly" in August

Earlier from the NY Fed: Empire State Manufacturing Survey

Business activity grew strongly in New York State, according to firms responding to the August 2017 Empire State Manufacturing Survey. The headline general business conditions index climbed fifteen points to 25.2, its highest level in nearly three years. The new orders index rose seven points to 20.6 and the shipments index edged up to 12.4, pointing to solid gains in orders and shipments. ...
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After retreating for the preceding three months, the index for number of employees increased two points to 6.2, pointing to a modest rise in employment levels, and the average workweek index advanced to 10.9, indicating that the average workweek...

NAHB: Builder Confidence increased to 68 in August

Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). “Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.” “The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,”...

Retail Sales increased 0.6% in July

On a monthly basis, retail sales increased 0.6 percent from June to July (seasonally adjusted), and sales were up 4.2 percent from July 2016.From the Census Bureau report:Advance estimates of U.S. retail and food services sales for July 2017, adjusted for seasonal variation and...

Tuesday: Retail Sales, Empire State Mfg, Homebuilder Survey

Mortgage rates rose moderately today as weekend news headlines suggested some measure of de-escalation of nuclear tensions between the US and North Korea. To be sure, the news wasn't resoundingly conciliatory, but investors took solace in it nonetheless.
... In the afternoon, comments from NY Fed President Dudley (one of the 3 most important voices at the Fed) kept pressure on rates, which seemed willing to recover in the late morning hours. Dudley affirmed investors' assumptions about upcoming Fed policy changes. Because these changes are net-negative for bond markets...