Housing Remains Resilient Despite Higher Mortgage Rates
THE TAKEAWAY: NAHB Housing Market Index for September met estimates of 58 -> August reading is revised lower from 59 to 58 ->USD Higher
Although the NAHB Housing Market Index for September came in exactly as estimated at 58, the readings for last month were revised lower from 59 to 58. Nevertheless, the 58 level is still the highest seen since 2005. The flat level MoM may stem from mortgage rates that have risen since Chairman Bernanke first hinted at a possible September taper. Due to concerns in these higher mortgage rates, we may see the Fed simply reduce purchases of Treasuries while leaving MBS purchases unchanged as many market participants are led to believe. Relatively sustained and strong data like this most recent housing market index print reinforces that hypothesis.
The NAHB Housing Market Index is a monthly print based on a survey of NAHB members. It is essentially a gauge of the single-family housing market and is measured between 0 and 100 with a higher number being the stronger.
We are at the highest levels since 2005.
Source: FXCM Marketscope
While market participants were speculating a disappointing reading, the flat print of 58 confirmed resilience in the U.S. housing market despite rises in mortgage rates by almost an entire percent since May. This sent the greenback even higher after Net Long-term TIC Flows for July gave the Dollar a boost following the U.S. open earlier.
Gregory Marks, DailyFX Research Team
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