It looked better than it really is … I am referencing the June housing start number that posted a staggering 9.1% gain. The outsized jump in housing starts was due primarily to a change in New York City’s building codes. New York City enacted a new set of construction codes effective July 1, that almost single-handedly lead to the big June gains in housing starts. If the impact of the “Big Apple” event was ignored, housing starts for the rest of country declined by 4.0%. Building permits were up 11.55% nationally — but up better than 70% in New York between May and June. Adjusting out the surge in the Northeast — building permits are up a measly 0.7% elsewhere.

In a separate report the Labor Department said claims for initial unemployment benefits grew by 18,000 during the week ended July 12th. Most observers had been expecting a larger surge in the headcount of people filling for jobless assistance. The fact that the number was softer than anticipated is really inconsequential — since incoming data from the labor sector remains weak.

Market is now off more than a full point, -33/32nds. The negative reaction is mostly due to the gains in the stock market over the last hour or so. Dow now up over 175.

For the balance of the week I look for mortgage investors to take their interest rate directional cues from trading action in the stock markets. Higher stock prices will tend to push mortgage interest rates fractionally higher while lower stock prices will likely support steady to slightly lower mortgage interest rates. We can be reached at 612-282-SOLD for your mortgage and Real Estate needs in Minneapolis MN.