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Housing Starts And Building Permits Disappoint

Ahead of tomorrow’s big speech from Fed Chair Janet Yellen regarding the state of the U.S. economy and whether the FOMC will decide to raise interest rates, we saw a new read on housing starts this morning. August Housing Starts fell 5.8% (annualized), while Building Permits were down 0.4%.

The Commerce Department report on housing starts showed 1.142 million seasonally adjusted new buildings started, down from a slightly revised 1.21 million in July. Regionally, the South slipped 14.8%, which is the steepest drop in the past 10 months. This region has been the biggest growth driver for while, but now we’re seeing the South drag on the read. All other regions — Northeast, Midwest and West — showed annualized increases.

Building permits are a forward indicator of the housing market, and they reached a total of 1.139 million in August, down from 1.145 million in July. Expectations were for a slight increase in building permits, but a 0.4% drop is not a frightening prospect. Muliti-family homes, which had been leading the housing market over the past several quarters, look to have taken a breather in August.

Wells Fargo WFC CEO John Stumpf appears on Capitol Hill today to explain his bank’s fabricated account scandal to a congressional panel. Reports are that Stumpf will accept “full responsibility” for the unethical sales practices, but it’s unclear what repercussions can be expected following this meeting. We are just a handful of weeks before the General Election, however, so we should probably expect some heavy political context along with the questioning.

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