Latest / Markets with Megan: A Quick Financial Markets Update / Housing Market Reacts to Rising Interest Rates | Episode 122 | 04-16-2024
Transcript
- 0:00Megan Horneman: Just as we thought we were making some progress or finding a bottom here in housing, higher interest rates are starting to wreak havoc again in the housing market.
- 0:08Megan Horneman: This is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors.
- 0:12Megan Horneman: We're coming to you today it is Tuesday, April the 16th with our regular segment of Markets with Megan and we want to discuss the economic data we got today on the housing market.
- 0:22Megan Horneman: Primarily, this was the data on housing starts and building permits.
- 0:26Megan Horneman: Housing starts was just a huge miss when you look from what the expectation was.
- 0:32Megan Horneman: It was for a modest decline in the month, but actually housing starts dropped 14.7%.
- 0:38Megan Horneman: That is the biggest monthly drop we've seen since the pandemic, since April of 2020.
- 0:44Megan Horneman: Monthly drop we've seen since the pandemic, since April of 2020.
- 0:49Megan Horneman: The declines were primarily in the multifamily sector, which is not that bad when we look big picture and we have to do that with economic data because we do have an overhang of some multifamily housing units but there was also a 12% drop in the single- family homes and that's what we need the inventory in order to get this tightness in housing to recover.
- 1:07Megan Horneman: Now.
- 1:07Megan Horneman: Permits is a leading indicator for future construction and this was disappointing as well.
- 1:12Megan Horneman: It fell 4.3% and the expectation was for it to only marginally drop by less than a percent.
- 1:18Megan Horneman: The biggest drop was in the single family.
- 1:21Megan Horneman: So again, that's a little bit concerning, because we have this housing shortage.
- 1:25Megan Horneman: We need to build homes for single families.
- 1:28Megan Horneman: The multifamily also declined, but that is you know.
- 1:31Megan Horneman: The single- family is the one that concerns us and what we're seeing is the mortgage rate has been hovering over 7% for the past basically two months and it's starting to have an impact back on the housing market.
- 1:44Megan Horneman: We'll get some more housing data this week that we will be back to report on.
- 1:52Megan Horneman: That's all we have today.
- 1:52Megan Horneman: If you have any questions or comments, please feel free to reach out to podcasts at verdence dot com.
- 1:55Megan Horneman: Thank you.