July housing starts were a bit lower than expected (746K vs. 756K), but building permits—which naturally come before starts—were higher than expected (812K vs. 769K). But all it takes is a quick glance at these charts of each series to know that residential construction is well into a significant recovery. To be sure, starts and permits today are only up to the worst levels ever seen prior to the Great Recession, but look how far they've come: starts are up 44% from last year's lows, and permits are up 58% from their recession lows. That's a huge recovery on the margin.
Home builders are definitely seeing an improvement in the housing market fundamentals, and they are responding accordingly. These folks are a lot closer to the action than you and I, and they are making some serious commitments. The housing market is looking better and better, and with confidence still quite low, there is still lots of room for improvement.
Four new starts (spec houses at point of start) going up in my new neighbor-hood. Bank land appraisers are still hyper-ventilating though.
ReplyDeleteJust four?
ReplyDeleteWithin a 3-mile radius of me, there are probably several dozen houses under construction. Plus dozens of lots with "sold" signs on them where they haven't even gotten around to constructing them yet.
The Housing Starts to Total Nonfarm payroll employment ratio is now
ReplyDelete.56%...the average for the 1990's was 1.17%... the low for the 1990's was January 1991 at .73%...The 30 year mortgage rate in
January 1991 was 9.64%...today's 30 year mortgage is 3.7%.