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Housing starts ran at a seasonally adjusted annual 1.35 million rate in May, according to the Commerce Department. The reading edged past the forecast among most economists. At a 1.35 million pace, housing starts saw the fastest activity since 2007. One weak spot in the report was building permits, which foreshadow future activity. They were at a 1.3 million pace, down 4.6% for the month. In other housing news, weekly mortgage application volume increased 5.1% last week, according to Mortgage Bankers Association. The gain was driven primarily by applications to refinance home loans, which rose 6% for the week. Turning to the markets, bond yields fell on reignited trade tensions between the US and China. Treasuries rallied with other safe havens leading both the 10-year and 30-year UST yields 6 basis points lower for the week. In line with their taxable counterparts, municipal bond yields also trended downward. The 10-year MMD finished 2 basis points lower to yield 2.46% while the 30-year MMD was 4 basis points lower to 2.96%.
Interest Rate Observations
Source: Thomson Reuters, Bloomberg. The table above reflects market conditions as of June 19, 2018.
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