Housing Starts

April 16th, 2014 10:02 am | by John Jansen |

Via TDSecurities:

Today at 8:53 AM
The pace of new residential construction rose marginally in March, posting a modest 2.8% m/m bounce to 946K, following the upwardly revised gain to 920K (previously reported as 907K) the month before. The improvement, however, fell well short of the market consensus for a more meaningful rise to 970K units, and the level of starts still remains 14% from its November peak. The weakness was exclusively in the volatile multi-unit segment of the market, which declined by 3.1% m/m (marking the third drop in 4 months, with a cumulative drop of 20% since the November peak), partially offsetting the 6.0% m/m bounce in the more significant single-family units.

On a regional basis, there were strong gains in building activity in the Northeast (up 30% m/m) and Midwest (up 65% m/m), reflecting the bounce-back from the weather induced slowdown of earlier months. However, building activity in the South (down 9.1% m/m) and West (down 4.5% m/m) slipped, possibly reflecting some deterioration in underlying housing market fundamentals beyond weather impact. Despite the disappointment on starts, building intentions remains quite firm, with the level of permits approval remaining close to the 1 million mark at 990K unit, though this is down 2.4% from February’s level.
The overall tone of this report was disappointing, as the missing bounce in building activity suggests some lingering weakness in this crucial sector of the economy beyond what could be attributed to the weather. Notwithstanding this disappointing performance, we continue expect the housing sector recovery to regain its footing and make up the lost ground in the coming months, especially as overall domestic economic momentum picks up.
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  1. One Response to “Housing Starts”

  2. By CGC on Apr 16, 2014 | Reply

    The issues here is the weak single family starts. Builders are now faced with a decision: do I start new projects, in April, which likely causes me to miss the height of the Spring purchase season, or do I postpone longer term? If they decide on the latter, that’s certainly a negative to the employment picture.

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