Housing Good & Bad News
Just like the overall economy near-term indicators of the housing market appear to be very strong. Housing starts were reported this AM and jumped to a an 11 year high in May with single family homes the strongest category. This has occurred as interest rates fell slightly from their recent highs despite another Federal Reserve Rate Increase. HOWEVER, PERMITS for May WHICH IS A LEADING INDICATOR FELL and continued to weaken post a rise in interest rates that started in earnest at end of 2017.
More importantly, if you look at the Housing Surprise Index which is a measure of reported housing data points relative to expectations it has fallen to mid 2017 levels indicating activity will slow considerably in the coming months. Thus, as we have been saying those in construction & housing should prepare for weaker growth.
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