Latest / Markets with Megan: A Quick Financial Markets Update / Housing Inventory Crisis Challenges Federal Reserve Efforts | Episode 148 | 06-20-24

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Housing Inventory Crisis Challenges Federal Reserve Efforts | Episode 148 | 06-20-24 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  Megan Horneman: Well, we're back at some pandemic levels here for housing guys.
• 0:04
  Megan Horneman: This is Megan Horneman.
• 0:06
  Megan Horneman: You're listening to the regular segment of Markets with Megan and what we're seeing today is we got information on housing starts and building permits.
• 0:14
  Megan Horneman: Housing starts obviously that's construction activity.
• 0:17
  Megan Horneman: That brings inventory to a very depleted inventory of homes.
• 0:21
  Megan Horneman: Building permits are a leading indicator for construction activity.
• 0:24
  Megan Horneman: Both of these fell to the lowest level since June of homes.
• 0:24
  Megan Horneman: Building permits are a leading indicator for construction activity.
• 0:25
  Megan Horneman: Both of these fell to the lowest level since June of 2020, so when we were in the depths of the pandemic, both of these were also, for the month of May, expected to be slightly higher, and keep in mind that May is typically a good seasonal period for houses.
• 0:42
  Megan Horneman: The big declines on a month-over-month basis it was broad.
• 0:46
  Megan Horneman: It was both single-family and multifamily homes.
• 0:49
  Megan Horneman: Multifamily housing starts now are down 50% versus a year ago.
• 0:55
  Megan Horneman: So we still have an inventory issue in the housing market and it doesn't look to be getting much better.
• 1:01
  Megan Horneman: So what does that mean?
• 1:02
  Megan Horneman: The Federal Reserve has talked a lot about housing inflation.
• 1:05
  Megan Horneman: This is sticky.
• 1:06
  Megan Horneman: There's nothing that they can do about that.
• 1:08
  Megan Horneman: They can't come out and build new houses.
• 1:10
  Megan Horneman: So this is something they'll pay attention to it is one month.
• 1:14
  Megan Horneman: We'll look at these as more trends as we get more data on the housing market, which we will get next week.
• 1:22
  Megan Horneman: The markets are off a bit today, but it's more from just some profit taking on technology.
• 1:27
  Megan Horneman: Technology's had such a massive run up, so we're seeing some profit taking there and we're seeing bond yields up a bit as well, because again you have less inventory, housing prices are going to stay elevated and that is a problem for inflation and for the Fed to be able to cut the way that most are anticipating.
• 1:45
  Megan Horneman: That's all we have today.
• 1:47
  Megan Horneman: We'll be back next week.
• 1:48
  Megan Horneman: We've got a lot more housing data to give you and we'll get that third reading on the first quarter GDP.
• 1:53
  Megan Horneman: Have a great weekend, thank you.