Chart of the Week: Weakness in Recent Housing-Related Economic Data

Chart Housing Sept 2018

The majority of U.S. economic data has been very healthy in 2018. However, recent data in the housing market has been one weak spot. The chart above shows the level of U.S. housing starts and building permits. Both building permits and housing starts have lost momentum in recent months. The short-term movements in both data sets can be volatile; however, we have now seen consecutive months of a slowdown. There are a few factors that we believe may be contributing to the slowdown: a rise in mortgage rates which makes buying a home less affordable and an increase in housing input costs, partially caused by recently enacted tariffs. The recent dip in housing data is no cause for panic, but this is a sector of the economy that we are paying attention to, especially given the current economic and political environment.