The housing start report is compiled by the Bureau of the Census and is a leading economic indicator of the state of the economy. The release is typically the first indicator to decrease when the economy goes into a recession and the first to increase during a recovery. Consumers tend to delay the purchase of new homes if they Re worried about the future of the economy. Regular declines in housing starts can lead to an economic slowdown. On the other hand, increases in housing starts are typically a sign of a strong economy.
Housing starts provide a warning of future economic activity.
In effect, a rise in housing starts leads to a fall in the bond market and vice versa. With the abundance of economic reports his week, housing starts will be just one of the factors that analysts look at to determine interest rate direction. The supply and demand for MSB's is the final determiner of how fixed rate pricing is set. Just like stocks, MSB's trade throughout the day. Large volumes of buying or selling can cause extreme fluctuations in the rate and point structure of loans available to borrowers.