While all the talk is on trade wars, we got a strong read on the housing market this morning.  Housing starts came in better than expected while permits declined. 

The 1,350,000 annualized rate of housing starts was a 5.0% increase month to month and 20.3% from a year ago.  This was the best housing starts report since July 2007. 

Single-Family Starts by Region:

Total housing building permits in May were down 4.6% from April’s rate, but 8% above year ago levels.  The seasonally adjusted annual rate for May was 1,301,000.   Market participants were looking for a rate of 1,343,000, 3.13% above the reported rate.  Single family permits were 2.2% below April’s rate, multi-units were 8.47% lower. 

Permits for single-family homes by region:

Units under construction were 1,127,000, bringing the second quarter average 0.5% above the first quarter.  This should have a positive impact on second quarter GDP.  Permits, which are a leading indicator of home builders confidence, is indicating supply constants may remain tight, at least into next month.  

 

Existing home sales data will be released tomorrow at 10 am, and we will be watching the supply of inventory number.  Last month unsold inventory was at a four-month supply, six months’ supply is indicative of a balanced market.   

 

 

The S&P 500 bounced off the support that we mentioned yesterday @ 2,742, today’s low was 2,743.   The Dow bounced off its 65-day moving average @ 24,526.  The Dow traded as low as 24,567 and is now 160 points off the low at 24,730.  Let’s see if the markets can find the resolve to rally into the close for a third day in a row.