Economic data this morning came from the Commerce Department reporting building permits rose 11.2% in March driven by a 25% jump in multi-family starts. Housing starts, the next phase in the construction cycle, rose 7.2% in March, but remember they fell 18% in February. New home sales are languishing as many folks opt for the distressed prices of foreclosed homes or short sales.
Monday’s news that Standard & Poors place a negative watch on U.S. debt surprised the markets, causing treasuries to rise in yield and pushing stocks lower. This morning U.S. stock indices are slightly positive while treasuries have recovered all of Monday’s losses. I view this as good news and bad news. It is good news that interest rates remain low, especially for those of us involved in the mortgage industry; however, the President and Congress are not likely to take S&P’s downgrade seriously and make the tough decisions if interest rates remain at these levels.
After rebounding Monday afternoon, mortgage bonds are trading flat from Monday’s market close.
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