|Home||Member Services||Tools & Research||About Us||Education||Subscribe||Your Account||Help||Logout|
Mixed Construction Data Shows Optimism
Yesterday we made note of the sky-high homebuilder confidence reading that showed builders in their best mood since 2007. Well, it looks like they're keen to put their money where their mouth is with housing construction data coming in a bit mixed, but overall positive today. The headline reading of housing starts actually came in slightly soft at 746k annually for July versus the 750k consensus, and that was down from 760k in June. However, it was still just modestly off of June, which was the highest since October 2008.
It got more positive when one looks at permits, which at 812k were up 6.8% month to month, and up 29.5% year over year. This was the highest reading for permits since August 2008 and indicates that builders are still looking to snap up land and set themselves up for expansion. In the past, upticks in permits have preceded starts so the prospect of increased construction remains, even if starts lulled a little this month. Meanwhile, completions were at a 2-year high and suggest more inventory may be hitting the market for sales.
There remains somewhat of a question of whether homebuilders are getting ahead of themselves considering optimism and construction is at these multi-year highs. However, we should also note that existing home sales have failed to make a comparable spike higher. In fact, there are shortages of homes in many areas. Thus, we aren't too afraid that the housing market is experiencing a re-bubble. Existing homes represent the vast majority of overall home sales, and have remained relatively flat for the past couple of years. The boost in construction, and in turn builder confidence, we believe largely comes from a genuine need for new inventory, contrary to 2010 when there was a supply glut and builders froze activity (see below).
Products & Services |
In The Media |
About Us |
All Rights Reserved.