'Our House' trends continue
Weekly Bond Commentary
Against the uncertain political and health backdrop, markets reflected a bit of economic optimism last week.
Strong housing data stole the show. Homebuilder confidence rose to its highest reading in the 35-year history of the report, doubtless reflecting five consecutive months of single-family housing starts gains. Building permits, a leading indicator of future housing activity, rose a stronger than expected 5.2%, and existing home sales rose 9.4%, putting sales at the highest level since May 2006. All-time low 30-year mortgage rates at 2.80% have helped affordability, even as home resale prices rose 14.8%, the fastest pace in 15 years. Housing inventory and days on the market both fell, indicating a robust market.
Weekly jobless claims fell to 787,000, below expectations but still well above pre-pandemic levels. Continuing claims eased lower, to 8.4 million, well above the 1.7 million pace in late February. National and regional manufacturing surveys ticked higher. The Markit U.S. Purchasing Managers’ survey indicated business confidence picked up notably across the manufacturing and service sectors to the highest level since May 2018, driven by hopes of continued client demand, lower political uncertainty post-election and a possible end to virus-related restrictions at some point.