New Housing Starts Unexpectedly Down in September

A day after positive news about existing home sales and housing prices, the data on new home sales sent a negative current through the economy. This morning it was reported that new home sales fell unexpectedly after 5 months of consecutive increases. Home sales fell from a seasonally-adjusted 417,000 new home sales in August to 402,000 in September, a decrease of 3.6%. But a survey of economists had predicted that the number of home sales would rise to 440,000 in September, leading to a prediction nearly 10% higher than the actual amount.

This is not the first time we have seen mixed housing data. While it is easy to speculate on the ups and downs of the market, only time can tell whether the bumps are telling of actual trends or merely slight deviations from the mean. This month, all the positive data about home prices and existing home sales, as well as climbing orders for long lasting goods, show that the industry may be beginning to recover, even if that recovery is a slow one with some set backs along the way.

New Housing Starts See Unexpected Jump in June

More people are starting to build new homes again, or at least, that’s what the numbers from the unexpected rise in housing starts in June appear to show. The number of housing starts rose 3.6% (or about 20,000 seasonally adjusted starts) to 582,000 units. Even larger leaps were seen in the number of housing starts of single family homes (14.4%) and the number of permits to break ground (8.7%). Analysts had expected these values to remain unchanged from previous months.

While the number of housing starts and permits to break ground are still down around 50% from a year ago, the increase is still a sign of progress. It seems that few aspects of the real estate industry have defied analyst’s expectations recently, and the large unexpected jumps are a definite exception. Although one wonders slightly whether developers will be able to fill all their new properties, it is good to see people building homes again. Perhaps once the new properties are completed, the worst of the recession will be over.

Housing Market Declining and Improving At the Same Time?

The construction industry is not doing well, but does that mean the market is down?

Alright, it’s 10am CST. I have already read five conflicting headlines with respect to the housing market today:

1. ”Housing Starts Hurt by Steep Drop in Apartment Building” – NYTimes

2. “Sales Drop 10%, But Home Depot Tops Forecasts” – NYTimes

3. “Builder Sentiment High on Affordability” – HousingWire.com

4. “Housing Starts Declined in April” – Wall Street Journal

5. “Signs of Optimism — Home Prices Rise” – Union-Tribune

So which is it?

These headlines, all from reputed publications, perhaps indicate the extent to which the market is saturated with housing news, as well as the vast amount of confusion in regards to which the direction the housing market is actually heading in. While it would certainly be easy to write about any one of these pieces, doing so would only steer your opinion in whatever direction the story I discussed took.

The data can be used to defend any viewpoint: Home Depot is doing well, Lowes is doing poorly. Housing starts for apartment buildings are on the decline. Housing starts for single family homes are stable. Housing prices are rising in some areas. The market still has not rebounded in others. The question is, which indicator do you deem to be the most important?

Or should we simply be acknowledging that it is too early to predict the rise or fall of the housing market with any certainty?

Housing Market Continues Decline in March

The US Census Bureau and HUD jointly released a report today which noted that the housing market continued to decline in March.

Building permits for privately-owned housing units dropped 9% below the Feburary rate and 45% compared to March of last year. For single family homes, the rate dropped 7.4% compared to February.

Housing starts declined 10.8% from February and 48.4% compared to March of last year. However, for single-family homes, the rate was unchanged from February.

But there is a silver lining– more houses were completed in March than in February. Privately owned homes were completed at a rate that is 3.5% higher than the month before, while single family homes were completed at a rate that is 5.0% higher than in February. The completion of homes is a good sign. It indicates that projects are still being completed and the growth of new homes.

The foreclosure market nonetheless surged during the first quarter. Foreclosures increased 9% over the previous quarter and 17% in March compared to February. Many of the new home sales are of foreclosed properties, especially in weakened markets, up to 70 or 80%.

Continued home sales, even if they are of foreclosures, mean the market has not stalled. Yet, increased foreclosure rates are not a good sign–hopefully the housing market will rebound soon.