A Little Ray Of Sunshine In Housing Starts
by ilene - July 17th, 2009 3:51 pm
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A Little Ray Of Sunshine In Housing Starts
Courtesy of Tom Lindmark at But Then What
There were some reasonably positive numbers on housing this morning.
Overall, housing starts were up 3.6% to a SAAR of 582,000. Within that number single family starts were up 14.4% to a SAAR of 470,000, Starts for two to four unit properties were down 25.8% to 112,000 and starts on properties with five or more units were down 29.4%. Permits were up 8.7% for a SAAR of 563,000.
Regionally, starts were up 28.6% in the Northeast, up 33.3% in the Midwest, down 1.4% in the South and down 14.8% in the West.
Here is a sampling of economists’ take on the numbers from the WSJ Real Time Economics blog:
- This report could be interpreted in two ways. On the optimistic side, it appears that residential construction activity may have stabilized, following three consecutive years of deep correction, and that housing activity could perhaps contribute favorably to U.S. economic activity in the second quarter. On the other hand, with sales continuing to lag behind the level of building activity by a factor of 200,000, this uptick in construction will likely mean that the inventory of unsold homes (which remains at historically high level) could continue to rise. As such, one could interpret this report as somewhat bitter-sweet. –Millan L. B. Mulraine, TD Securities
- While starts have moved off of their cyclical bottom, we see limited upside potential over the months ahead. In the single family segment, continued weakness in the labor market and what will remain a steady stream of foreclosures will keep downward pressure on house prices and ensure that builders – in an increasingly broad geographic range of markets – see steady competition from low-priced foreclosures. –Richard F. Moody, Forward Capital
- With the number of unsold homes for sales already extraordinarily high and set to ramp up further in coming months as foreclosures accelerate and the recent backup in mortgage rates potentially puts some pressure on sales, this recent spike in single-family housing starts certainly seems ill-advised and likely to worsen still massive imbalances in the housing market. Meanwhile, rising apartment vacancy rates, an even worse inventory situation in the condo market than for single-family homes, and the collapse of the commercial real