Bond Market Update

Data Recon

• Total housing starts declined 8.1% month-over-month in September to a seasonally adjusted annual rate of 1.439 million units (Briefing.com consensus 1.465 million). Building permits rose 1.4% month-over-month to 1.564 million (Briefing.com consensus 1.550 million).
• The key takeaway from the report is that there was ongoing weakness in starts and permits for single-family units, which were down 4.7% and 3.1% month-over-month, respectively. The downturn corroborates the adverse impact sharply higher mortgage rates have had on buyer demand and builder sentiment.
  • The change in single-unit starts by region: Northeast (-6.5%); Midwest (-13.8%); South (+2.5%); and West (-15.8%).
  • The change in single-unit permits by region: Northeast (+3.6%); Midwest (-1.8%); South (-2.0%); and West (-8.8%).
  • Multi-unit starts were down 13.2% month-over-month. Multi-unit permits were up 7.8% month-over-month.
  • The number of units under construction at the end of the period increased 0.5% month-over-month to a seasonally adjusted annual rate of 1.710 million.
• Yield Check:
  • 2-yr: +9 bps to 4.53%
  • 3-yr: +11 bps to 4.54%
  • 5-yr: +10 bps to 4.32%
  • 10-yr: +10 bps to 4.09%
  • 30-yr: +7 bps to 4.09%