Building permits and housing starts were released today. Starts of single-family homes are down 10.2% year-over-year. That drop in constructed units would explain why builder sentiment is only at 46 (50 and above being the threshold of positive vibes).  Including multifamily dwellings, there are 1.29 million new doors being put up every year, which is not nearly enough to meet the demands of the 1.9 million new households being formed each year. Additionally, 100 million Americans sitting on a 3%-ish interest rate on their current home is also stifling their desires to sell their existing home. Cutting to the chase, the demand for homes is going to continue to be greater than the supply, which will continue to push home prices upward.

At the conclusion of the fed meeting today, where they are most assured that going to cut 25 basis points, they will release their “dot plot prediction”. The last prediction released in September projected an aggregate 1% drop in interest rates during 2025. Given the increase of inflationary pressures, today’s projection is expected to not account for quite as many cuts. We will know for sure in four hours.