Bond Market Update

Data Recon

• Housing starts in July decreased 9.6% month-over-month to a seasonally adjusted annual rate of 1.446 million (Briefing.com consensus 1.543 million) from June's upwardly revised rate of 1.696 million (from 1.559 million) while building permits -- a leading indicator -- were down 1.3% month-over-month to a seasonally adjusted annual rate of 1.674 million (Briefing.com consensus 1.647 million) from June's upwardly revised rate of 1.696 million (from 1.685 million).
• For the second month in a row, the headline miss has been softened by upward revisions to last month's figures. This is masking the fact that housing starts are now at their lowest level since early 2021 while building permits are also receding from a high that was seen earlier this year.
  • The change in single-unit starts by region: Northeast (+60.4%); Midwest (-27.8%); South (-17.7%); and West (-2.7%).
  • The change in single-unit permits by region: Northeast (+17.3%); Midwest (+2.5%); South (-6.7%); and West (-6.9%).
  • Multi-unit starts decreased 10.0% month-over-month while multi-unit permits increased 2.5%.
  • The number of units under construction at the end of the period decreased 0.1% month-over-month to a seasonally adjusted annual rate of 1.678 million.
• Yield Check:
  • 2-yr: +2 bps to 3.20%
  • 3-yr: +4 bps to 3.16%
  • 5-yr: +3 bps to 2.94%
  • 10-yr: +2 bps to 2.81%
  • 30-yr: +1 bp to 3.11%