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Housing Starts Data Raises 5th Recession Red Flag

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"I’m raising my fifth recession red flag today based on the Census Bureau‘s May housing starts data. Housing starts showed a miss on the estimate but positive revisions. Housing starts came in at 1.549 million and housing permits came in at  1.695 million.

Housing completion data did grow to 1.465 million and more of the backlogged homes are finished. However, considering Wednesday’s builder confidence index and mortgage rates over 6%, it’s time to raise the fifth recession red flag, since the builders will have a tough time growing housing starts with rates this high. 

The data from the NAHB/Wells Fargo builder’s survey is always crucial because it is forward-looking, and it takes the reality of today’s market into the equation. However, the most current one doesn’t account for the higher rates we have today."

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