Last week November Housing Starts were released Wednesday and also exceeded expectations and the prior month’s reading. 1.09 million housing starts were reported for November against expectations of 963,000 and October’s reading of 889,000 housing starts.
Building permits issued in November came in at 1.01 million and fell short of October’s reading of 1.04 million permits issued. November’s reading exceeded expectations of 990,000 permits issued.
Last week’s big news emerged after the conclusion of the Federal Reserve’s FOMC meeting. The committee announced that it would begin tapering the Fed’s $85 billion purchases of securities. The taper was modest; the Fed will reduce its rate of purchases to $75 billion monthly, with a split of $40 billion in Treasury securities and $35 billion in mortgage-backed securities.
Fed Chairman Ben Bernanke gave his final press conference as Fed chair. He noted that the FOMC was confident that the economy would continue to improve at a moderate rate and that the Fed would continue monitoring economic and financial developments to guide future adjustments in its monthly purchase of securities.
Mortgage rates were expected to rise after news of the Fed’s tapering of its quantitative easing program, as the program was intended to hold down long-term interest rates and mortgage rates.
Mortgage Rates, Jobless Claims Rise
Weekly Jobless Claims came in at 379,000 and were higher than projections of 338,000 and the prior reading of 369,000 new jobless claims. Although the reading was the highest since March, analysts attributed the higher reading to changes in work schedules during the holidays.
Sales of existing homes slipped to their lowest levels in close to a year. The NAR reported that existing home sales fell from 5.12 million in October to 4.90 million in November.
Projections were set at 5.00 million sales for November, but a shortage of available homes and rising mortgage rates were seen as reasons for fewer sales. The approaching holiday season and cold weather typically contribute to a lull in home sales during the winter months.
This week’s is a holiday shortened week as the bond market will close early on Tuesday and reopen on Thursday. The biggest event of the week will likely be the release of Durable Goods Orders followed by light trading as many traders will be on vacation. Below is a schedule of economic releases.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|23-Dec||8:30 AM||Personal Income||–||0.50%||-0.10%|
|23-Dec||8:30 AM||Personal Spending||–||0.50%||0.30%|
|23-Dec||8:30 AM||PCE Prices – Core||–||0.10%||0.10%|
|23-Dec||9:55 AM||Michigan Sentiment – Final||–||83.3||82.5|
|24-Dec||7:00 AM||MBA Mortgage Index||–||NA||-5.50%|
|24-Dec||8:30 AM||Durable Orders||–||2.20%||-1.60%|
|24-Dec||8:30 AM||Durable Goods -ex transportation||–||0.60%||0.40%|
|24-Dec||9:00 AM||FHFA Housing Price Index||–||NA||0.30%|
|24-Dec||10:00 AM||New Home Sales||–||433K||444K|
|26-Dec||8:30 AM||Initial Claims||–||350K||379K|
|26-Dec||8:30 AM||Continuing Claims||–||2850K||2884K|
|27-Dec||10:30 AM||Natural Gas Inventories||–||NA||-285 bcf|
|27-Dec||11:00 AM||Crude Inventories||–||NA||-2.941M|