“Davidson” submits:

The HMI, a builders sentiment indicator, was reported a cycle high 76. Note that Single-Family Starts does not support this enthusiasm. It is likely that the builders are seeing the proposed impact from regulation reductions on bank lending before there is impact on starts data. This is something to watch.

Keep in mind that Single-Family Starts is a hard-count indicator while the HMI is a market sentiment survey, i.e. market psychology. Market psychology does not create Employment, Personal Income nor Retail Sales. Only expansion of credit has this effect. The Mortgage Credit Availability Index (MCAI) displayed signs in recent reports that regulation reduction for community banks may be having a positive impact. However, it is too early to tell.  Homebuilders are certainly positioned to be aware of a wholesale positive shift before anyone else.

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