THE BASIS POINT

Housing Starts up while SFR Starts Fall.

 

Consumer Price Index  (June 2015)
– CPI month/month  +0.3% Previous was +0.4%
– CPI year/year    +0.1%. Previous was +0.0%
– CPI core (less food & energy) month/month  +0.2%. Previous was +0.1%
– CPI core (less food & energy) year/year   +1.8%. Previous was +1.7%.

With core CPI near the Fed’s stated target of 2.0% and the Unemployment Rate below 6% the Fed may feel that a rate hike is the right move.

The problem I see is that while the Fed may be meeting its dual mandate, economic growth (GDP) is still quite weak averaging 2.2% growth for the past 3 years +.

Housing Starts (June 2015)

– Starts seasonally adjusted, annualized 1,174,000. Previous was 1,069,000
– Permits seasonally adjusted, annualized  1,343,000. Previous was  1,275,000.

This growth is in units. Single Family start fell as multi-family (apartments) increased. This is an interesting statement about what is happening.  Rents have soared making apartment building lucrative. The American dream of home ownership has suffered a setback.

 

 

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