According to weekly data put out by FreddieMac, mortgage rates are popping to yearly highs. According to a statement put out by FreddieMac, "Treasury yields rose ahead of the release of the Fed's Beige Book and speeches from New York Fed President William Dudley and Fed Governor Randal Quarles. According to the Beige Book, economic activity in March and early April continued to expand at a moderate pace, however, there is concern from various industries surrounding tariffs. Following Treasury yields, mortgage rates soared. The U.S. weekly average 30-year fixed mortgage rate rose 5 basis points to 4.47% in this week's survey, its highest level since January of 2014 and the largest weekly increase since February of this year." HOUSING STARTS: In a report out on April 17 from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.Permits for single-family homes were at a rate of 840,000, a decrease of 5.5% compared with a revised 889,000 in February. NAHB Chairman Randy Noel noted, "Single-family starts dropped slightly this month, but single-family permits year-to-date are up 5% from their level over this same period in 2017." LUMBER COSTS AND LABOR SHORTAGE: According to various reports out recently, the national labor shortage is making it increasingly difficult and expensive to find construction workers. With that, the price of lumber, an integral part of the cost of building a home, is skyrocketing. According to a recent statement from an industry research group, Wood Markets, the continuation of U.S. duties on Canadian lumber exports to the U.S., are expected to cause more short-term market and price volatility in softwood lumber. "The preliminary duties launched earlier in 2017 rocked the U.S. market and more of the same is expected in 2018." According to the Wall Street Journal, the lumber issue is being exacerbated by a shortage of railcars and trucks to ship the product. Stinson Dean, a broker in Kansas City, Mo., who ships wood from sawmills to lumber yards, said, according to the WSJ. "None of us have experienced a market like this. We are in a lumber supply crisis." PRICE ACTION: In afternoon trading, shares of companies in the home-building group, including PulteGroup (PHM), D.R. Horton (DHI), Lennar (LEN), KB Home (KBH), Toll Brothers (TOL), Meritage Homes (MTH), and Beazer Homes (BZH), are all lower.
