NEW YORK (TheStreet) -- Data show housing starts in August increased, but not by as much as expected, TheStreet's Chris Ciaccia told Brittany Umar.
Single-family housing starts rose while multi-family housing starts dropped. According to Ciaccia, this is a good thing because families are moving out of apartments and condos and into their own homes. Ultimately, this creates more jobs for the economy.
The Federal Reserve's FOMC meeting will conclude on Wednesday, and the market is expecting about $10 billion to $12 billion in tapering bond purchases.
Ciaccia said if the Fed only tapers its Treasury bond purchases, then mortgage rates should be fine. However, if the Fed cuts its MBS (mortgage-backed securities) purchases, then there could be some serious repercussions. However, he said he does not expect the Fed to touch MBS and that it would be surprising if there was no taper at all. Should the Fed not taper, bond yields would likely crater and housing permits would start to jump. Ciaccia concluded that with or without tapering, he expects the housing recovery to continue, just at a slower pace. The Fed has been -- and will remain -- accommodative to the housing market. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell