Latest / Markets with Megan: A Quick Financial Markets Update / Housing Feels the Middle East Fallout | S3 E 138 | 04-15-26

Transcript

Housing Feels the Middle East Fallout | S3 E 138 | 04-15-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: We're starting to see the impact of the conflict in the Middle East show up in some of our housing data.
• 0:05
  Megan Horneman: It is Wednesday, April the 15th, and happy tax day.
• 0:08
  Megan Horneman: This is Markets with Megan.
• 0:09
  Megan Horneman: If you like this podcast, you can subscribe.
• 0:12
  Megan Horneman: You can hit the alarm bell or share it with your friends, family, colleagues, anybody who likes to dig into the economic data that we receive every day and what that means for the economy and then the different asset classes.
• 0:23
  Megan Horneman: So let's dig right into the data we received this morning and some data we got earlier this week.
• 0:28
  Megan Horneman: It surrounds the housing market.
• 0:30
  Megan Horneman: And this is a part of the economy that has been struggling for years.
• 0:34
  Megan Horneman: Higher mortgage rates, higher costs.
• 0:36
  Megan Horneman: This has been a problem for the mortgage market.
• 0:39
  Megan Horneman: And we did, in the beginning of this year, have some signs of life there from the perspective of prospective buyers coming in and looking at homes.
• 0:47
  Megan Horneman: And that's because we had a drop in the mortgage rate.
• 0:50
  Megan Horneman: But now the data we got this morning is for home builder confidence.
• 0:54
  Megan Horneman: And this is for the month of April.
• 0:56
  Megan Horneman: We saw the biggest monthly drop in home builder confidence since May of 2025.
• 1:03
  Megan Horneman: And that's because mortgage rates did spike.
• 1:07
  Megan Horneman: And this is this they also spiked last year in May of 2025 when we were dealing with the concerns around Liberation Day.
• 1:17
  Megan Horneman: Here we are about a year later, a similar situation around inflation and rising costs because of the conflict in the Middle East.
• 1:25
  Megan Horneman: Mortgage rates have jumped up again, they're to a seven-month high.
• 1:29
  Megan Horneman: And we've seen material costs also rising.
• 1:32
  Megan Horneman: So home builders are concerned about this.
• 1:34
  Megan Horneman: About 62% of them surveyed said that the suppliers were increasing building material costs.
• 1:41
  Megan Horneman: And then about 70% of those surveys actually said that they were unsure of how to price things because they um the uncertainty around how much building material costs will continue to rise.
• 1:52
  Megan Horneman: Remember, the Strait of Hormuz doesn't just carry oil.
• 1:55
  Megan Horneman: There's a lot of other products that come out of that.
• 1:57
  Megan Horneman: So that supply chain disruption is causing some pricing pressures now in the housing market.
• 2:03
  Megan Horneman: Earlier this week, we also got data on existing home sales, which were also weak.
• 2:08
  Megan Horneman: They fell about 3.6% to a nine-month low.
• 2:11
  Megan Horneman: And that was attributed to the fact that we got that spike in the mortgage rate.
• 2:15
  Megan Horneman: So the housing market is still very sensitive to the moves that we see in the mortgage rate.
• 2:21
  Megan Horneman: Mortgage rates are sensitive to the moves we see in treasury yields, and treasury yields are sensitive to inflation pressures.
• 2:27
  Megan Horneman: So we this is um news that we'll probably see some more coming out as with the data from March and April start to hit the tape.
• 2:34
  Megan Horneman: That's all we have today.
• 2:35
  Megan Horneman: If you want a history of our podcast, you can go to marketswithmegan.fm.
• 2:38
  Megan Horneman: Thank you.