Housing Starts Decreased in August

Economic Overview - The housing market is cooling down due to high interest rates, which lead to elevated mortgage rates [1] Housing Starts and Building Permits - August Housing Starts decreased to 1.307 million seasonally adjusted annualized units, the lowest since May and down from 1.429 million in July [2] - Building Permits also fell to 1.312 million, indicating a softening in the forward-looking housing starts market [5] Single-family vs Multi-family Homebuilding - Single-family homebuilding declined by 7% month over month and 12% year over year, while multi-family units decreased by 11% month over month but increased by 15% year over year [3] Mortgage Rates and Homebuyer Sentiment - 30-year fixed mortgage rates were around 6.5% at the time of the survey, currently down to approximately 6.13%, but still considered high for average homebuyers [4] - Homebuilders are in a "wait and see" mode due to affordability issues, with only luxury homebuilder Toll Brothers showing a strong outlook [6] Fed Interest Rate Expectations - The Federal Reserve is expected to cut interest rates for the first time in 2025, with a likely 25 basis-point cut [7][8] - Fed Chair Jerome Powell's press conference will be crucial for insights on future rate cuts [9] Fed's Balance Sheet and Housing Market - The Fed has been unloading assets from its balance sheet, including mortgage-based securities, which may be discussed in relation to supporting the housing market [10]