UPDATE 1-Canada August housing starts weakest since April
Recent posts The Christian Science Monitor Weekly Digital Edition These are all legitimate concerns, of course, but they pale in comparison to what I believe is the number one threat right now: Interest rates. RECOMMENDED: Top 10 best ‘flip market’ cities And by interest rates, I do not mean the absolute level, but the velocity of the increase, taking place at a speed the markets are currently unprepared for and businesses may not have planned for. The effect of higher rates on the housing market is already being felt in the New Home Sales number. We’ve seen a 20% drop-off in new home sales in June and July, and this does not bode well for existing home sales in the coming months or in Case-Shiller home prices next quarter.
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The August figure was the weakest housing start reading since April, when new homes were being built at an annualized rate of 175,922. The average so far this year stands at around 183,200. property management in baltimore “Although today’s report and yesterday’s permits data suggest housing is holding up fairly well, we expect higher mortgage costs, buyer fatigue and recent policy changes to contribute to a more appreciable slowing in the months ahead,” Peter Buchanan, an economist with CIBC World Markets, said in a client note. The report follows data out Monday which showed building permits hit record levels in July, mostly from robust strength in the commercial sector. Canadian policymakers have been keeping a close eye on the country’s housing market after record low interest rates helped fuel a post-recession property boom that some fear could be a bubble.
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