Wednesday, January 20, 2010

Housing Starts Down 4%; Permits Up 10%

From Bloomberg:

Building permits in the U.S. unexpectedly jumped in December, signaling gains in housing will be sustained into 2010 after winter weather depressed construction at the end of last year.

Applications rose 11 percent to a 653,000 annual rate last month, the most since October 2008, the Commerce Department said today in Washington. Work began on houses at a 557,000 pace, down 4 percent from November.

Builders are probably anticipating sales will increase after the government extended a tax credit for first-time buyers through June and expanded it to include some current owners. Record foreclosures and unemployment near a 26-year high represent hurdles that may prevent the industry from strengthening much further.

Note that the number of starts has been consistent for about 8 months. Yes -- it's at a low level. While new home inventory has been dropping builders are still concerned about overall demand. Hence the low rate of growth.
Note by NDD:

There is a certain very well-known blog which, month after month, has been complaining about the reporting of housing starts and permits, among other housing data, because the reporting has failed to note that the situation is awful because the numbers showed Year-over-Year declines.

Well, today both the permits and starts numbers were positive YoY, starts just barely but permits by a substantial amount. So what did that blog have to say about the YoY numbers today? Nothing, that's what.