Posted on 04/16/2010 5:58:54 AM PDT by Oldeconomybuyer
(Reuters) - U.S. housing starts rose more than expected in March to their highest level since November 2008 and permits to build new homes scaled a 17- month high, according to a government report on Friday that offered hope the housing market recovery remained on course.
The Commerce Department said housing starts rose 1.6 percent to a seasonally adjusted annual rate of 626,000 units. February's housing starts were revised up to show a 1.1 percent increase, which was previously reported as a 5.9 percent drop.
Analysts polled by Reuters had expected housing starts to rise to 610,000 units. Compared to March last year, starts were 20.2 percent higher.
(Excerpt) Read more at reuters.com ...
Gee...this is sooooo unusual, it must be caused by global warming...aka...SPRING!!!!!!
I’m stumped. Who are all these people building new houses while there are so many foreclosed houses available at deep discounts?
I just read last week that housing starts were lower last month. Can’t we get factual news anymore?
Doesn’t make sense since there’s still most likely 4.7 million empty / unsold / foreclosed homes for sale nationwide. Seems like Las Vegas will soon be a ghost town.
That's my question too. In my area we have several recently finished subdivisions of new homes that are more than 3/4 empty. The prices in these new subs have dropped to unbelievable levels (compared to the original prices from 2 years ago).
More real but fake news. One new house would make this true.
Starts are seasonally adjusted.
That means they are comparing them to what they did LAST March. Not what they did in December, January or February.
Starts are up because they are building more houses.
THIS IS A FACT. My customers(lumber yards, truss plants, etc.) business is all UP from last years pace.
We bottomed out at 480,000 last year. This was approx. a 45 year low. They are now at 620,000. Do the math.
However, this is still significantly down from 2 million in 2004. Keep in mind most economists believe we need to be building about 1.4 million houses per year just to keep up with population growth and the fact that houses need to be replaced about every 75 years on average.
The Lumber Broker
All real estate is local. Just because there are empty houses and lots of foreclosures where you are has nothing to do with building in Seattle or somewhere else.
Also, a lot of the recent activity can be linked to the new home buyer tax credit. These houses tend to be on the smaller end of the market. Not the 3000 sq ft + houses.
I have heard that in certain markets like Phoenix that large homebuilders bought finished subdivisions at prices cheap enough to undercut the individual foreclosures on the market.
Their response; “because the money is already budgeted”, the money was “already in the pipeline”, etc., etc., etc. All this is going to do is inflate inventories of unsold and unsellable ‘new’ homes - which have changed 0 in three years.
IT’S ABOUT JOBS, PEOPLE; not about fabricating a false perception. All the new homes you can build are not going to change sales potential.
This is an outright lie... just propaganda.
“Tell a lie often enough it will become the truth”. Hitler
LLS
626,000 is still incredibly low. The 1959-2009 average is 1.5 million homes driven by average new household formations of 1.1 million per year and the replacement of 400,000 older homes. While 626,000 is "high relative to expectation" it is incredibly low relative to historical averages.
BTW, almost nobody expects starts to get back near the average for at least 2-3 years exactly because of the foreclosure inventory you mention.
With your knowledge of the situation: Are many of these houses being built on spec? Or are almost all of them being built by the new homeowner?
These are “seasonally adjusted annualized numbers” that take “Spring” into account.
I haven't seen any specific stats on new households, but I've seen that rental vacancy rates are up, and I've heard anecdotal comments about people moving back in with their parents or children. I'm unclear on how many new households there really are nowadays.
That's another thing that I'll never understand about these reports, whether it's unemployment claims or new housing starts. How can you count something, and then say that it's totally different than the count you just came up with?
Yes, some are being built on spec.
I do not know the percentage.
I would suspect most are being built with a commited buyer.
The banks have been extremely cautious on lending money to the home building industry.
They went from one extreme(we will give money to anybody)to the opposite(you need a 800 credit score and a six figure income with 30 % down) to get a loan.
Basic statistical methods. We know that homebuilding is lower in December than in June because of weather and we have 50+ years of observations telling us how many December homes = how many June homes. They apply these “seasonal” factors to the raw data to come up with the “Seasonally adjusted” data. All the seasonal factors are published with the Census data. They also publish the raw data.
BTW, every political poll you read about also includes adjusted numbers to adjust the actual sample collected to the perceived sample profile of the electorate. they never just add them up and publish the results.
The problem comes in when they don't add their "special seasoning" for the other factors that can throw the numbers off... like an expiring first-time buyers credit.
It says "a seasonally adjusted annual rate of 626,000 units". Does that assume the numbers aren't skewed by the government incentives?
By the way, I didn't look at the detailed report to see if there was an answer to my questions there. If the article proclaims "Here's what you need to know about the status of the housing construction industry", I don't want to have to become an expert at their statistic methods to know whether or not it's a bunch of toro.
“Does that assume the numbers aren’t skewed by the government incentives?”
No, it does not. Many factors have an impact on starts. Interest rates, inventories of existing homes, forclosures,
weather, etc. all have affect.
The new/existing home buyer tax credit is due to expire at the end of April. Therefore, people have an additional incentive to purchase prior to the end of April. This has increased demand and resulting starts.
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