Treasuries and mortgage bonds are flat to yesterday’s close after a report showed that U.S. housing starts increased in March less than predicted.
The Treasury will be auctioning another $129 billion this week. Also this week, the FOMC will have its two-day meeting and rate announcement. Although a rate increase is not expected, folks will again by paying close attention to the language in the statement. Specifically, whether or not they reiterate that rates should remain “exceptionally low” for an “extended period.”
Construction on new housing posted better-than-expected results, for an increase of 2.8% in the month of January. This is the highest level of activity for housing starts in six months. This positive report is thought to have been influenced by the first-time home buyer tax credit and the low mortgage rates. It is also a sign that the housing market may be stabilizing, and recovering slowly but surely.