Lowered mortgage rates boosted the building permits – it can be a real surprise
Joesph Weinman
Oct. 18, 2006

The data is due at 8.30 AM. The market expects 1715K from prior month’s 1727K. The building permit data closely inversely correlates (nonlinear) the acceleration of mortgage rate rise or fall over time with a little lag. According to that model the building permits will come much stronger.

Building permits are permits taken out in order to allow excavation. A few months after a reduction in mortgage rates these building permits and housing starts both rise.

It seems in the Northeast, Midwest, South, and West the permits data will come out stronger.

According to some analysts, the permits and housing starts will reflect the lower mortgage rates as the ten year note yield rallied from 5.2% to 4.5% in a very short period.

Lowered mortgage rates boosted the building permits – it can be a real surprise
Joesph Weinman
The building permit data closely inversely correlates (nonlinear) the acceleration of mortgage rate rise or fall over time with a little lag.
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