Real Estate Housing Market DataThe headline print indicated that housing starts increased by 1.5% to a seasonally adjusted annual rate of 1.228 million. Analysts were expecting a rate of 1.24 million. Stripping out the seasonal adjustments, housing starts actually increased by 0.4%, which is a positive divergence compared to the 0.7% decline that is average for this time of year. The year-to-date increase now sits at 31.8%, which is just marginally above the seasonal average change of 31.0% by the end of October. Parsing the regions, the north-east and south are trending in line with their seasonal average trends, while the Midwest is jumping firmly above it. The west, meanwhile, is trending below its seasonal norm. There is only slight evidence of a hurricane snap-back following the significant dip in starts in the south during the month of September. As for the gauges of future activity, permits are trending in line with their seasonal average trend, higher by 18.7% through the end of October. But while builders are holding steady with permit activity, they appear to be stockpiling these plots of land on which to build. The change in the level of of housing units authorized but not started is trending well above average. A similar trend was apparent last year, but while back then it appeared that builders were preparing for the potential tailwind created by the pending tax cuts, a similar setup is not apparent this year. Given that sales have not picked up to the magnitude that builders were expecting in this new tax era, completions are starting to wane. Completions had been trending inline with its seasonal average trend, but it is now falling below this norm. Seasonally, starts continue to decline into the colder winter months, then snap back in the spring as the home buying season gets underway.
|