Transcript for Housing Starts Stumble
Okay. It is Tuesday June 17 Wall Street is open for business at today's big number one million. Number housing starts annually in this country. Out this morning for the Commerce Department and when I'm Dan Butler in New -- are here to help explain what a million means housing starts or blister on finance. -- happy Tuesday to you. If you think and -- -- elicit a million dollars as great a million of almost any thing is great a million new homes though not break down the numbers and for us. -- now it's unfortunate that like a big round happy amber but unfortunately this was lower than expected and was -- decline and six point 5%. Housing starts are essentially a home builders breaking ground on new homes and it's a gauge of how how is saying in and the housing recovery. And this latest big here just indicates what we've now which is that housing market has turned shaky and the recovery has become. Less this certain this year and and this confirms that this was the first time. A -- these numbers we've seen a decline in four months they had been on the right track and -- -- -- and building permits which also. Come out with this data and that is permits for houses to be built -- have ground broken on in the future. Those also -- six point 4% and were much fewer if -- analysts were expecting on an annual basis so. This is just one more data point letting us now that the housing recovery Dan -- shaky and that had been a strong part. The US economic recovery now it's turned to a bit of -- -- Well let me ask you this senator going to project a -- -- -- but but that cars -- different -- from sales of existing pounds as far as the importance -- in -- Canada temperature on the economy. So they all give IS data point and what is at picture how housing is doing and I'm glad you brought that -- because April we -- -- encouraging data. When it comes to sales figures existing home sales rose. And that was the first time that they had. This year a new home sales rose so. We -- mixed bag you know we had a really cold start to the year which put a damper. Online sales and on bill -- and then you'd expect this big rebound and we saw some signs and then in April but now. This made out of point eight sheds and negative light on it and let me birth coming -- -- the next home builder confidence rose in June. -- that was a good sign but again and this all fits into a picture. Which we take to -- -- -- trying gauge where exactly the housing market is and it just kind of looks shaky and and not. And a little unstable. It was speaking of confidence that you brought out there at last month fed chair Janet Yellen has said that there and -- was one sector of the economy that she worried about most. That -- housing this cautionary note that she goes on to say about housing situation -- so how's the Fed gonna see this morning's numbers. So the federal -- data like this is indication that housing is soft and something that they need to be concerned about as you said Jane. -- -- was and you had went to the economy this year that the Fed is focused on so weakness in the housing market would give the Fed reason to believe that they need to continue with accommodation or have more accommodative policies. An order to keep interest rates low to keep mortgage rates low to keep the housing market churning out one of their heavy winds for housing has -- and that mortgage rates have risen and that his that combined with rising home prices and made houses not as affordable to prospective buyers I should mention at market rates. Our lisle based on historical norms. But at four point 2% for a thirty year fixed mortgage that is substantially higher than it was a -- a year and a half ago. So keeping rates low was one thing that the -- due to trying -- the housing market and that's something that. Will be never mind as they continue to taper -- which tape where bond buying is one of the things that helps keep rates low. They are tapering are pulling back on not so this certainly factors and Ted bear consideration of how accommodated they want to beat and it would make and think that they should be more accommodative seeing continued weakness in housing market. So that's -- main -- to see if we can afford to go out and buy a home not I -- like talking second home on this but what about Wall Street how's the market reacting to these. It's so islands futures turn negative right before the ballot looks like that the markets and that's Indy 500 in negative territory earlier this morning futures are higher they turned negative after we've gotten this data we also has an inflation -- -- -- with a little bit higher than expected so. A few missing is on economic data coming out in the market -- Fractionally. Negative this morning. -- loyalists are from Yahoo! finance -- thanks so much north pleasure to see you. I'd hate to see and of course -- latest headlines right here at abcnews.com. You know -- -- the big number -- that learning.
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