April Housing Starts fell to a new record low this morning, down 12.8% to 458K units.  The April decline was due in most part to a 42% drop in multi-family housing units.  Single family homes were not much better, falling to a record low 185K units.  The West had a good month, up 26.6% while the Midwest rose 14.3%.  The Northeast however slipped 13.6% and 4.6% in the South.  Building Permits did not escape the beating, falling to a record low 494K units. 


While we see a stabilizing housing market in the making, the time period to work off the inventory and regain its health will take the balance of this year at a minimum. 


After an early flurry, trading has gone quite with most markets hanging around unchanged.  The 10 year note is off 6/32’s (yield 3.24%), mortgage backs are off 1/32nd, and stocks are up a nickel on the big board.  Trading volume is running at only 80% of the norm, giving us a preview of what “summer time blues” trading is all about.  Readings on our chart work have turned neutral/bearish on daily time frames but overall, we see the market at “value” will little movement either way.  For your reference, a close above 3.25% on the note (bad) or a close below 3.18% (good) will be needed to move the market.