Bond Market Update

Data Recon

• January housing starts declined 9.8% month-over-month to a seasonally adjusted annual rate of 1.366 million (Briefing.com consensus 1.400 million) from an upwardly revised 1.515 million (from 1.499 million) in December. Building permits rose 0.1% to a seasonally adjusted annual rate of 1.483 million (Briefing.com consensus 1.450 million) from a downwardly revised 1.482 million (from 1.483 million) in December.
  • The key takeaway from the report is that there was no growth in starts or permits for single-family housing units, which will contribute to ongoing affordability constraints in the existing home market, which is short on inventory. Single-unit starts were down 8.4% month-over-month while single-unit permits were flat.
• Yield Check:
  • 2-yr: +1 bp to 4.31%
  • 3-yr: +1 bp to 4.33%
  • 5-yr: +2 bps to 4.41%
  • 10-yr: +3 bps to 4.57%
  • 30-yr: +3 bps to 4.79%