Housing starts declined 3.1 percent in October, following a 1.9 percent decrease in September. Building permits also declined 0.6 percent after falling 3.1 percent in September. Single-family housing starts led the decline, falling 6.9 percent from September, while units in buildings with five units or more rose 9.7 percent. Declines were recorded in the Northeast and South, while the West and Midwest gained.
Forward-looking building permits fell 0.6 percent in October and were 7.7 percent lower compared to last year. Privately‐owned housing completions in October declined 4.4 percent for the month but were 16.8 percent higher than last year.
However, existing home sales rebounded sharply in October, posting the first annual gain since mid-2021, as home sales jumped 3.4 percent. The uptick likely reflected contracts signed in August and September, when mortgage rates were declining in anticipation of the Federal Reserve launching its policy easing cycle.
Mortgage rates are not directly tied to the fed funds rate and the average 30-year fixed mortgage rate has surged roughly 0.7 percent since early October. The Fed’s monetary policy influences mortgage lenders and the general direction of borrowing rates, however, mortgages also respond to an interplay of economic factors, including investor expectations, geopolitical events and shifts in the bond market. Instead, mortgage rates track the 10-year Treasury which is more sensitive to changes in economic data.
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