Housing Starts Are Dismal
U.S. homebuilders rebounded less than expected from a nine-month low in July, suggesting the housing market was likely to tread water for the rest of this year against the backdrop of rising mortgage rates. Housing starts rose 0.9 percent to a seasonally adjusted annual rate of 1.168 million units last month, the Commerce Department said on Thursday. Data for June was revised down to show starts declining to a 1.158 million-unit rate, the lowest level since September 2017, instead of the previously reported 1.173 million- unit pace. Starts rose in the Midwest and South, but dropped in the Northeast and West. Last month's increase in groundbreaking activity left the bulk of June's 12.9 percent plunge intact. Building permits in- creased 1.5 percent to a rate of 1.311 million units, snapping three straight months of decreases.
Everyone Is Pretty Much Employed
The number of Americans filing for unemployment benefits fell for a second straight week last week, suggesting no impact yet on the labor market from ongoing trade tensions between the United States and its trading partners. Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 212,000 for the week ended Aug. 11, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported. The claims data is being closely watched for signs of layoffs as a result of the Trump administration's protectionist trade policy, which has led to an escalating trade war with China and tit-for-tat import tariffs with other trading partners, including the European Union, Canada and Mexico.
Student Loan Debt Hits $1.5-Trillion
America’s student loan problem just surpassed a depressing milestone. Outstanding student debt reached $1.521 trillion in the first quarter of 2018, according to the Federal Reserve, hitting $1.5-trillion for the first time. Though the marker is somewhat arbitrary, it offers a reminder of how quickly student debt has grown—jumping from about $600 billion 10 years ago to more than $1.5 trillion today—and that the factors fueling the increase aren’t likely to disappear any time soon. “People pay attention to milestones,” said Mark Kantrowitz, a financial aid expert. When student debt surpassed $1 trillion in 2012, “it definitely caused a shift in coverage of student loans in the news media,” he said. In theory, that helps raise awareness of the issue for student advocates, lawmakers and, in particular, borrowers when considering what college to attend. But Kantrowitz added, “What’s more important is the impact on individual borrowers.”. Millions of millennials have already put off settling down because of the rising costs of servicing college debts to the detriment of economic growth. Student loans are now the second largest category of household debt in America, trailing only mortgages at $9 trillion.
Courtesy of Sotheby's International Realty's in-house Lender Simon Atik, 310.880.8414, Simon.Atik@grarate.com, Vice President of Mortgage Lending, Guaranteed Rate Affinity.
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