1/21/2015
By Jennifer Coombs

Complementing yesterday’s positive report from the National Association of Home Builders (NAHB) was today’s release of housing starts and permits for the month of December. Housing activity was shown to have picked up during the month and, this time, the strength was concentrated in the single-family component. Housing starts recovered by 4.4% in December after declining by 4.5% in November. Expectations were for a pace of 1.041 million starts in December, but the pace came in at a seasonally adjusted annual rate (SAAR) of 1.089 million which was up 5.3% over last year. Housing permits on the other hand, declined by 1.9% in December after a 3.7% decrease in November, for a SAAR of 1.032 million units. This made the pace up 1.0% on a year-over-year basis, while analysts forecasted a SAAR of 1.060 million unit permits. Most encouraging was the fact that permits for single-family homes increased by 4.5% in December, however multifamily permits declined by 11.8%. With all these mixed signals, we note that housing is still on a flat trajectory without a solid long-term trend. However, the fact that strength is coming back in the single-family component is very encouraging going forward.

Jennifer Coombs
Wall Street Strategies

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