Some real estate data, including what Lennar said/Claims remaining more elevated

After a jump last week in mortgage applications for both purchases and refi’s, they slipped by 3% and 2.1% respectively w/o/w. The average 30 yr mortgage rate did drop almost 10 bps to 6.84% but we know the issue is not just mortgage rates but the 50% rise in home prices over the past 5 years in terms of affordability.

The May US Architecture Billings Index rose 4 pts to 47.2, though remaining below 50. The increase was led by commercial/industrial and multi family. The chief economist there said “Business conditions remained sluggish nationwide in May, with nonresidential construction activity continuing to decline in several major metro areas. Firms across all specializations reported declining billings this month. However, the pace of decline slowed at firms specializing in multifamily residential projects. These, along with institutional work, are likely to be the first to return to growth when conditions begin to improve.”

Staying on real estate, housing starts came in about 100k below expectations at 1.256mm, down about 140k m/o/m and with ALL of the decline coming in the multi family category where starts fell by 140k m/o/m to 332, the lowest one month print since last November. Single family starts were up by 4k.

With permits, single family declined to just 898k, the lowest since April 2023. Multi family permits issued totaled 495k, down 4k m/o/m.