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August 21, 2023, WEEKLY MARKET UPDATE
A combination of hawkish Fed minutes, rising bond yields globally, and fading recession expectations at home saw the 10-year US treasury bond move up to a 4.3% yield (levels not seen since 2008) and average 30-yr mortgage rates climb to 7.34% — just shy of the previous peak set in October 2022 (7.37%). [Mortgage News Daily]
Here is the summary statement from the last Federal Open Markets Committee (FOMC) meeting. "With inflation still well above the Committee's longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy." [Federal Reserve]
In July, the number of permits (units authorized) and starts (actual construction) for single-family homes rose. This tends to be a volatile data series from month to month, so seeing that the 3-month average for SFH permits has now risen for five straight months was heartening.
That's great, but unfortunately, it's just not enough. Builders will complete 1.3–1.4 million new housing units (77% SFH, 23% Multifamily) over the next 12 months. But households are being formed at ~2 million a year. [Census Bureau]
If you have any questions, need advice, or want to explore exciting market opportunities, please don't hesitate to reach out. I wish you a fantastic week filled with sunshine and endless possibilities!
