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NOVEMBER 20, 2017 — US HOUSING STARTS HIT 1-YEAR HIGH
Housing starts surged 13.7 percent in October to 1.29 million units. This was the strongest growth rate since October 2016. September’s starts were also revised up to 1.135 million units from the previously reported 1.127 million units.
Nearly half the increase is attributable to a jump in construction in the South following the disruptions caused by the hurricanes and efforts to replace houses damaged by flooding. Economists are betting new builds will support economic growth going forward. The number of Americans hoping to become homeowners should rise along with the employment gains from the low unemployment rates and expected wage pressure. Surveys show Millennials are now starting to enter the housing market releasing a new generation purchasers.
Indications are the economic recovery is staying on track. The Fed meets in three weeks and it is expected they will announce another 0.25 percent increase in the Fed funds rate. Take the time to review your future debt obligations and consider hedging through the use of interest rate swaps, which offer the best rates available with their minimal costs over LIBOR.