Latest / Markets with Megan: A Quick Financial Markets Update / Analyzing the Housing Shortage and Market Shifts | Episode 156 | 07-17-24

Transcript

Analyzing the Housing Shortage and Market Shifts | Episode 156 | 07-17-24 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The housing market is showing some signs of life everybody at least, for the month of June that is.
• 0:05
  Megan Horneman: We got this morning it is Wednesday, June the 17th, and we got the housing data, the housing starts and building permits for the month of June.
• 0:14
  Megan Horneman: Now, keep in mind in the month of June we did see a pullback in the mortgage rate, so we did see better activity in the housing market, which is good news.
• 0:21
  Megan Horneman: Housing starts came in better than expected.
• 0:24
  Megan Horneman: They rose 3% after declining the month prior, and the expectation was for them only to rise about 1.8%.
• 0:32
  Megan Horneman: So really good there from the Housing Start perspective.
• 0:35
  Megan Horneman: Now, building permits this is, building permits are more of an indication of future activity, so we do look at those as a leading indicator for housing, and building permits as well came in much better than expected.
• 0:47
  Megan Horneman: It was actually the first increase that we've seen in four months.
• 0:50
  Megan Horneman: The economists were looking for them only to rise 0.1%, but building permits rose 3.4%.
• 0:56
  Megan Horneman: So much better there.
• 0:58
  Megan Horneman: Now what does this mean?
• 1:00
  Megan Horneman: Let's dig in a little bit into some of the details.
• 1:02
  Megan Horneman: So the housing data gets broken into single family and then multifamily starts, and we need single family homes.
• 1:09
  Megan Horneman: We do know that we have a shortage in this country with single family homes.
• 1:13
  Megan Horneman: Unfortunately, the starts were concentrated completely in the multifamily, so multifamily housing starts were up almost 20% for the month.
• 1:23
  Megan Horneman: When you look at the single family homes, though, they've continued to decline.
• 1:27
  Megan Horneman: So for the month we were down for the fourth consecutive month, and then building permits doesn't tell a much better story for the single family homes.
• 1:34
  Megan Horneman: Building permits were actually lower as well for the month.
• 1:38
  Megan Horneman: They've declined now for the last five consecutive months, and you did see a big increase in the multifamily on a month-over-month basis for those permits.
• 1:48
  Megan Horneman: So again, more construction for multifamily units, but not for the single-family homes.
• 1:53
  Megan Horneman: So we would like to see a little bit better there from the single-family perspective.
• 1:58
  Megan Horneman: That's all we have today.
• 1:59
  Megan Horneman: We'll be back tomorrow with one of our favorite economic indicators, the Leading Ind leading indicator index.
• 2:05
  Megan Horneman: I apologize, that has been something that we followed for a very long time.
• 2:10
  Megan Horneman: It tends to be a precursor to a recession, especially if you've seen significant periods of time that this has been negative.
• 2:17
  Megan Horneman: We will be back tomorrow to dig into those details and see how that has materialized, because the housing starts and housing data does have a component in that index, and if you have any questions, please feel free to reach out to podcast at verdence.
• 2:32
  Megan Horneman: com.
• 2:33
  Megan Horneman: Thank you.