Bond Market Update

Data Recon

• Total housing starts increased 4.6% month-over-month in June to a seasonally adjusted annual rate of 1.321 million units (Briefing.com consensus: 1.300 million). That is the good news. The bad news is that single-unit starts declined 4.6% month-over-month. Total building permits increased 0.2% month-over-month to a seasonally adjusted annual rate of 1.397 million units (Briefing.com consensus: 1.383 million). That is the good news. The bad news is that single-unit permits declined 3.7% month-over-month.
  • The key takeaway from the report is that there wasn't any strength in single-unit starts and permits, which is where the strength needs to be to help curtail the affordability constraints in an existing home market that is still relatively light on available inventory for sale.
• Yield Check:
  • 2-yr: -5 bps to 3.87%
  • 3-yr: -5 bps to 3.84%
  • 5-yr: -5 bps to 3.96%
  • 10-yr: -4 bps to 4.43%
  • 30-yr: -2 bps to 5.00%