http://MikesDailyMarketReport.com: Housing Starts dropped in February from 1.584 million adjusted annual units in January's report to 1.421 million in February; also, Building Permits (future Housing Starts) dropped from 1.886 million adjusted annualized units to 1.682 million in February. As we saw yesterday, that Home Builders weren't feeling as confident in March. This may be partly to the rise in their costs, which lumber alone rose approximately 200% YoY. These costs may be too much to pass onto the Buyers, so their outlook isn't so rosey! Stocks are in Mixed Territory, as the DOW remained the lone index in Positive Trading ahead of the FOMC Announcement at 11am PST. The Fed isn't expected to raise rates, but Investors will be listening for any changes in their language; as well, as reviewing the Dot Plot for any changes to Fed Members' projections for the next rate hike (December's Dot Plot projected 2024 for next possible rate hike); and for any comments about the SLR, which the ratio between the Banks supply of Bonds/Treasuries and Lending capacity. The Fed had granted them unlimited capacity last April, but it is supposed to expire in about 2 weeks. It's expected that it will be extended; so, Investors will look for any comments about it. If it's extended, then we could see some improvement in Yields, thus helping Mortgage Rates. Speaking of Mortgage Rates, they've worsened since yesterday's close, as MBS is currently Down about 22bps ahead of the Fed's Announcement; and Yields have spiked up again to 1.67% (projecting possible next level to 1.75%). We are currently at the same levels at February of 2020 (just prior to all the lockdowns).
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