Tuesday, December 20, 2005


Housing Starts Up, But ... Wait A Sec ...

The November Numbers (.pdf) are in at the Census Department. And they're not the type of doom and gloom some expected. Indeed, housing starts rose to the annual rate of 2.12 million in November, which was an increase from the revised October rate of 2.02 million. That makes November the fourth best month on record for housing starts.

But, with mortgage rates and inventories both increasing, there's a major cause for concern, as noted at CNN:
There is a risk that continued strong building could create excess supply of new homes, and drive prices down. A separate report from the Census Bureau on new home sales through October shows the supply of new homes on the market has been rising steadily for the last year, with an increase every month since April. Overall there has been a 20 percent increase in the supply of new homes available since October 2004. And the average price of a new home has slipped during that period.
Here's the report from the Census Department (.pdf):
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new
residential construction statistics for November 2005:
BUILDING PERMITS

Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 2,155,000. This is 2.5 percent (±1.0%) above the revised October rate of 2,103,000 and is 3.0 percent (±1.2%) above the November 2004 estimate of 2,093,000.

Single-family authorizations in November were at a rate of 1,710,000; this is 0.2 percent (±1.0%)* above the October figure of 1,707,000. Authorizations of units in buildings with five units or more were at a rate of 361,000 in November.

HOUSING STARTS

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 2,123,000. This is 5.3 percent (±7.7%)* above the revised October estimate of 2,017,000 and is 17.5 percent (±6.8%) above the November 2004 rate of 1,807,000.

Single-family housing starts in November 2005 were at a rate of 1,808,000; this is 4.8 percent (±8.3%)* above the October figure of 1,725,000. The November rate for units in buildings with five units or more was 277,000.

HOUSING COMPLETIONS

Privately-owned housing completions in November were at a seasonally adjusted annual rate of 1,837,000. This is 4.9 percent (±5.8%)* below the revised October estimate of 1,932,000, but is 6.5 percent (±7.4%)* above the November 2004 rate of 1,725,000.

Single-family housing completions in November 2005 were at a rate of 1,579,000; this is 0.6 percent (±7.0%)* below the October figure of 1,588,000. The November rate for units in buildings with five units or more was 238,000.

New Residential Construction data for December 2005 will be released on Thursday, January 19, 2006, at 8:30 A.M. EST. The scheduled release dated for 2006 are as follows: January 19, February 16, March 16, April 18, May 16, June 20, July 19, August 16, September 19, October 18, November 17, December 19.


— The Boy in the Big Housing Bubble