Posted on 09/17/2013 8:37:14 AM PDT by whitedog57
The “Goodbye Larry! (Summers)” Treasury yield decline yesterday was short lived. After Summer pulled out as a candidate for Federal Reserve Chairman, the US Treasury 10 year yield fell 11 basis points yesterday morning, but the exuberance quickly went away.
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Speaking of interest rates, the National Association of Home Builders Market Index was flat for September compared to August, but missed expectations by the most since April.
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If we compare the NAHB Index with new home sales, we see a daunting gap between builder “optimism” and reality.
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And if we include the Bankrate 30 year rate, we see that Builder Optimism is rising with mortgage rates. If rates are rising because of an improving economy, this would make sense. But if it is simply the unwinding of the Fed’s monetary stimulus.
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Finally, if we compare the NAHB Optimism Index with the MBA Purchase Application Index, we see the daunting gap again.
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In conclusion, the NAHB Home Builder Index is flat but less than expected. Rising mortgage rates and rotten consumer income growth are creating a daunting gap between expectations and reality.
household-income-monthly-median-growth-since-2000 (1)
***Rising mortgage rates and rotten consumer income growth...***
What ‘growth’ in income? Rotten income is the more accurate description methinks.
It is called a depression. Not every depression is ‘The Great Depression’, but this one is warming up to be as bad, or even worse!
I think 299,000 of those homes are being built in Texas. New houses are going up like crazy in North Fort Worth.
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