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What to watch for in real estate this week

10 year bond yield - LTEnlarge GraphAfter a relatively benign week, bonds have a lot of data to navigate

Bonds rallied last week after a huge sell-off on the back of a stronger-than-expected jobs report. It appeared the sell-off was exacerbated by thin volume and bonds rallied. This week, we have a lot of data, although most of it will be of interest to the homebuilders than the mortgage REITs. Earnings season has begun as well.

Economic data this week

Monday, July 15th

  • Empire Manufacturing
  • Advance Retail Sales
  • Business Inventories

Tuesday, July 16th

  • Consumer Price Index
  • Industrial Production
  • Capacity Utilization
  • Manufacturing Production
  • NAHB Housing Market Index

Wednesday, July 17th

  • MBA Mortgage Applications
  • Housing Starts
  • Building Permits
  • Fed Beige Book

Thursday, July 18th

  • Initial Jobless Claims
  • Philly Fed
  • Index of Leading Economic Indicators
  • Bloomberg Consumer Comfort

Friday, July 19th

  • No Data

Earnings Releases this week:

Wednesday, July 17th

  • CYS Investments (CYS)

Implications for mortgage REITs

For REITs like Annaly (NLY) and American Capital (AGNC), they simply need some stability in the bond market. There are probably no economic releases next week that will move the bond market. REITs will take note of CYS Investments (CYS) earnings report on Wednesday. The Index of Leading Economic Indicators will be interesting too, but since it is based on reports that have already been released, it shouldn’t be market moving.


Implications for home builders

The data next week is very relevant to the homebuilders. First, we have the National Association of Homebuilders Sentiment index, which should come out relatively positively given what we have already heard from KB Home (KBH) and Lennar (LEN). It will be interesting to see if smaller builders are experiencing the same sort of environment as the big publicly-traded homebuilders are. On Wednesday, we get Housing Starts and Building Permits, which are obviously homebuilder-relevant.

Industrial Production and Capacity Utilization will speak to manufacturing employment, which is important to the builders. There are no known homebuilder earnings next week, although Bloomberg has a placeholder for NVR on Friday.