From: HARVEY GOLDSMITH (CANTOR, FITZGERALD L)
At: Oct 17 2012 09:07:36
Housing Starts and Building Permits for September far exceed the expected readings to nearly head scratching levels.
Starts rise by 15% to 872K , well beyond the survey 770K and above the uprevised prior 758K from 750K.
Permits jump 11.6% to 894K beyond expected 810K and above prior minor revision of 801K from 803K.
Both data points are up to the highest levels in four years. Single Family starts which are 75% of the housing market rose by 11% and Multi family continued to show strength growing by 25%.
Regional breakdowns show the only declines were in the Northeast and more than made up by double digit gains in the west and south.
There seems no question , both from a sentiment view, starts and sales data, that the housing market has turned. Record low mortgage rates , employment gains and higher consumer confidence may be contributing to the healing in the sector.
However, the depths of the housing recession were so great that Homebuilders sentiment, for instance, though reaching a four year high yesterday at 41 is still defined by that measure as poor.
Also, the three years 2009-2011 were the worst for home building since 1959 and the current strength is far below the peak of 2.1Million reached in 2005.
But these data are undeniably positive indications of a housing sector resurgence which may begin to become an underpinning to the economy.
With Building Permits showing gains it would appear that there is a sustainability of this strength as permits usually translate into starts over two month cycles.