Live Markets: Two-fer Tuesday: A dastardly duo of downbeat housing data
LIVE MARKETS-Two-fer Tuesday: A dastardly duo of downbeat housing data Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
TWO-FER TUESDAY: A DASTARDLY DUO OF DOWNBEAT HOUSING DATA
Tuesday's data duet offered investors exhibits A and B in the case of the tanking housing market.
First, groundbreaking on new American homes USHST=ECI dropped 5.2% in September to 1.221 million units at a seasonally adjusted annual rate (SAAR), according to the Commerce Department.
That's 6.4% weaker than the 1.305 million units SAAR analysts were expecting, and extends August's downwardly revised 5.9% drop.
Below the headline, single-family projects—which account for the lion's share of the total—fell 4.6%. The volatile multiple-unit segment slumped 6.7%.
On a less dire note, building permits USBPE=ECI — considered one of the housing market's more forward-looking indicators — inched 0.2% lower to 1.400 million units SAAR, or 0.4% north of consensus.
Here, permits for single-family projects slid 4.0%, offsetting the multiple-unit segment's 6.1% gain.
“Builders are pulling back as the spike in mortgage rates causes demand to evaporate within the housing market,” writes Ben Ayers, senior economist at Nationwide. “With the 30-year fixed mortgage rate settling near 7.5 percent for the time being, it’s unlikely that the building activity will regain much footing until spring 2027 at the earliest."
Indeed, war-related inflation fears have sent benchmark Treasury yields spiking, dragging already-elevated mortgage rates with them. Last week's 7.5% was the highest level for the average 30-year fixed contract rate since November 2023.
Separately, signed contracts for the pending sales of pre-owned US homes USNAR=ECI unexpectedly dropped by 7.3% last month, according to the National Association of Realtors (NAR), much steeper than the negligible 0.5% dip economists projected.
The number wipes out the prior month's measly 0.3% increase.
NAR's pending home sales index has been wallowing near the trough touched directly after mandated COVID shutdowns ever since 30-year fixed mortgage rates crept above 6%, more than four years ago.
"Market conditions weakened in September due to fast-rising mortgage rates,” says Lawrence Yun, NAR's chief economist.
"Mortgage rates could be topping out,” Yun adds. “However, increasing energy prices and the resulting inflationary pressure are highly uncertain."
(Stephen Culp)
*****
EARLIER ON LIVE MARKETS:
ANTHROPIC'S IPO COULD MINT AI FORTUNES FOR ALPHABET, AMAZON CLICK HERE
HEALTHCARE SHINES AS AI TRADE EASES CLICK HERE
S&P 500 STALLS NEAR RECORDS; KEY LEVELS IN FOCUS CLICK HERE
BYE-BYE SAASPOCALYPSE? SAP CHARTS TURN BULLISH AHEAD OF EARNINGS CLICK HERE
CAN TIGHT CREDIT SAVE AI? CLICK HERE
TIME FOR LUXURY TO GIVE UP ON CHINA BOUNCEBACK CLICK HERE
LNG WAVE COMING, JUST NOT RIGHT NOW CLICK HERE
GENERALIZED SELLING; AI WORRIES SIMMERING CLICK HERE
EUROPE BEFORE THE BELL: LOTS OF WORRIES TO CHOOSE FROM CLICK HERE
MORNING BID: KOREAN CANARY IN THE AI COALMINE CLICK HERE
( )
