Bond Market Update

Data Recon

• Total housing starts declined 8.5% month-over-month in August to a seasonally adjusted annual rate of 1.307 million (Briefing.com consensus: 1.375 million) from a revised 1.429 million (from 1.428 million) in July. Building permits declined 3.7% month-over-month to a seasonally adjusted annual rate of 1.312 million (Briefing.com consensus: 1.370 million) from an unrevised 1.362 million in July.
  • The key takeaway from the report is the weakness in single-unit starts (-7.0% month-over-month) and single-unit permits (-2.2%), which is a reflection of affordability constraints for builders and prospective homeowners alike. Strikingly, single-unit starts in the South—the nation's largest homebuilding region—plunged 17.0% in August.
• Yield Check:
  • 2-yr: +1 bp to 3.52%
  • 3-yr: +1 bp to 3.48%
  • 5-yr: +1 bp to 3.59%
  • 10-yr: UNCH at 4.03%
  • 30-yr: -2 bps to 4.63%