January Housing Starts

 

Homestead Mortgage, L.C.

January Housing Starts
After hitting a four-month high in December of 973,000 units on an annualized basis, Housing Starts dropped by 8.5% in January from December after jumping nearly 16% from November to December. The Housing Starts repor...t measures the number of residential units on which construction is begun each month. A start in construction is defined as the beginning of excavation of the foundation for the building and is comprised primarily of residential housing.

 

 

 

 

Stocks are modestly higher and Mortgage Bonds are struggling. The President gave his State of the Union address last night and promoted policies that some in the Bond market are viewing as inflationary. Specifically, a 20% + rise in the minimum wage, bringing it to a federally mandated $9 per hour. The Bond market is always concerned with inflation, and inflation from wages is a cost that typically gets passed onto the consumer. Retail Sales were up just 0.1%, and while this was in line with expectations, it’s still lackluster. Bond prices have crashed right through the floor of support at 102.875 this morning. The next support level is at 102.375 - about 30 BP beneath present levels (see chart below). Until Stocks show signs of weakness, the trend in Mortgage Bond pricing should remain lower.

January Job Creation

Homestead Mortgage, L.C. 
January Job Creation - The Labor Department reported on February 1 that employers added 157,000 new jobs in January, below the 180,000 that was expected. As seen in the chart below, the 157,000 jobs created in January of 2013 was well below the 275,000 in January of 2012. Still convinced everything is fine and moving in the right direction?