Thursday, December 17, 2015

November housing report: almost all great news

 - by New Deal democrat

The November housing report overall was excellent, but there is still one nagging open question.

Let's do the good news first.  Except for the June spike, this was the best report since early in the Great Recession:

This, along with November's post-recession record vehicle sales, is the simple but devastating rebuttal to those who claim we are already in a recession. We're not.

Even better, single family house permits did set a post-recession record:

This is pure good news.

Multi-family housing spiked in November as well:

Record rents should be creating demand for more multi-unit housing, and the flatness in this metric for the last 4 months has been puzzling.

Now for the nagging concern:   like most analysts, I have been putting down the spike in June exclusively to expiration of a housing program in New York.  It turns out that only half of the spike can be attributed to New York, as shown in the below graph of total permits (red) vs. pemits ex- NY (blue) [NOTE: graph only goes through October]:

So the decline in permits from July through October can't just be laid at New York's feet. And the state-by-state breakdown in permits won't be reported until next week.

In the meantime, we do have the regional breakdown through November, and here is what permits for all regions ex- the Northeast looks like:

So while I can't signal "all clear" on this most leading part of the US economy until housing permits ex-NY set a new high, we did set a decisive new high in all other regions in November.  Most likely, next week we'll find that is true for everywhere except New York, and then I can declare this month's report  unvarnished great news.