5/19/2015
By Jennifer Coombs

There was absolutely no indication of a spring surge in the housing and construction space until today’s numbers finally confirmed that it’s true. The April 2015 housing starts and permits report is one of the strongest on record, with starts rocketing by 20.2% over last month to a much higher-than-expected seasonally adjusted annual rate (SAAR) of 1.135 million and permits up 10.1% to 1.143 million. Both readings easily topped the high end of consensus’ range for 1.120 million for each. This gain in starts is the best reading in over seven and a half years and the gain in permits is the best reading in seven years. The overall strength in starts is split between single-family, up 16.7% to 0.733 million, and multi-family, up 27.2% to 0.402 million. Single-family starts, which are a huge driver for the economy, are up a very convincing 14.7% year-on-year with permits up only 0.5%. On the other side, permits are stronger due to multi-family units, which are up 20.5% to a SAAR of 0.477 million. However, this clearly underscores the importance of renters in the housing sector. Permits for single-family homes were less spectacular, but still very solid with a 3.7% gain to a SAAR of 0.666 million. Year-on-year, single-family permits still lead the fray at +7.1% versus +5.5% for multi-family permits. We also note that the report includes annual revisions including a net 10,000 upward revision to March 2015 and February 2015 (now 0.944 million and 0.900 million, respectively). This report, as well as the revisions, are real eye-openers and will re-establish some long-lost confidence in the housing sector.

Jennifer Coombs
Wall Street Strategies

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