Housing Starts and Pending Home Sales Fall Short of Estimates
September housing starts came in at 1.221 million vs 1.30 million expected and pending home sales fell 7.3%; the 10-year yield was 5.12% on Oct. 20.
U.S. housing data released on Tuesday, Oct. 20, came in below expectations. September housing starts were 1.221 million, short of the 1.30 million estimate and down from 1.288 million, a 5.2% monthly decline against a forecast 1.9% gain. Building permits were 1.40 million, slightly above the 1.39 million estimate, falling 0.2% on the month versus an expected 0.7% decline.
Pending home sales fell 7.3% in September, compared with an estimated 0.5% decline, and were down 11.3% from a year earlier against a forecast 1.0% increase. The Redbook index rose 9.0% year over year, compared with 10.4% the previous week. The API reported a crude oil inventory draw of 4.93 million barrels, larger than the 1.3 million barrel draw expected.
FRED data showed the 10-year Treasury yield at 5.12% and the 2-year at 4.79% on Oct. 20, a 10-year/2-year spread of 33 basis points. The VIX closed at 17.31, the high-yield option-adjusted spread was 3.33% and the effective federal funds rate 3.88%. The most recent broad dollar index reading was 121.40 as of Oct. 16.
CNBC reported that housing is flashing warning signs just as the Fed weighs more interest rate hikes. Fox Business reported that Jamie Dimon touted a strong U.S. economy, and an Investopedia headline said the yield on "the most important financial asset in the world" is forecast to stay high through 2026.
Data
| Release | Actual | Estimate | Previous |
|---|---|---|---|
| Housing Starts (Sep) | 1.221M | 1.30M | 1.288M |
| Housing Starts MoM (Sep) | -5.2% | 1.9% | -5.9% |
| Building Permits (Sep) | 1.40M | 1.39M | 1.403M |
| Pending Home Sales MoM (Sep) | -7.3% | -0.5% | 0.3% |
| Pending Home Sales YoY (Sep) | -11.3% | 1.0% | -4.7% |
| API Crude Stock Change | -4.93M | -1.3M | -11.12M |
| 10-Year Treasury | 5.12% | ||
| VIX | 17.31 |
Data: FMP, FRED. Figures are close-to-close unless stated.
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