Housing starts for May were up 4.3% as the economy started to reopen and mortgage rates fell to historic lows. This was a pleasant surprise but the truly remarkable number was the surge in building permits for new construction. The month over month increase was 14.4% to 1.22 million annualized units. Also, builders saw a spike in applications to buy a home which has been increasing for 9 weeks in a row.
Housing is one of the foundations of our economy and it looks to be leading the way out of a deep recession. The FED has promised to leave rates alone which should keep the 10-year treasury yield low enough to continue to support the very low mortgage rates. Housing at least appears to be on a sustainable path.