Housing Starts and Permits
Less Sanguine Single-Family Details Beneath the Headlines
1. Single-family permits down modestly as builder confidence remains weak: Single-family housing permits fell 1.2% to 401,000 units annualized in August from 406,000 units in July (revised down 2.4%), better than our expectation for a 3% decline to 394,000 but still at the lowest level since April ‘09, as builders remain cautious given the lack of demand. Total permits increased 1.8% to 569,000 units annualized from 559,000 units in July (revised down from 565,000), above our 540,000 estimate and consensus expectations for permits to remain flat at 560,000 units, driven by an 11.9% increase in multi-family (5+ units) permits. Single-family permits fell 4.5% in the Northeast, 2.4% in the West, 1.4% in the Midwest, and were flat in the South.
2. Single-family starts post a surprising gain, driven by seasonal adjustments, but unlikely to hold in September: Single-family starts increased 4.3% to 438,000 units annualized in August from 420,000 units annualized in July (revised down 3% from 432,000 units), better than our 415,000 estimate. This increase went against the trend lower in permits (July permits fell 3.6%), aided by a 3% drawdown in housing units authorized but not yet started as well as an upward seasonal adjustment (single-family starts actually fell 0.7% sequentially on an unadjusted basis). We expect starts to fall in September based on the decline in permits, especially as permits are now running well below starts (401,000 vs. 438,000). Total starts jumped 10.5% to 598,000 units annualized in August from 541,000 units annualized in July (revised down from 546,000), well above our 524,000 estimate and consensus of 550,000, driven by a huge 42.7% surge in multi-family starts. Single-family starts increased 22.7% in the West, 18.9% in the Midwest, and 0.5% in the South, while falling 28% in the Northeast.
Blog Authors opinion: for more information or the full report please contact me. The market is still way down in a relative sense. This is probaly a blip in the long steady recovery we are headed towards. Homebuilding in Charleston SC has still been extremely limted with exception of first time homebuyers (and tax credit) via production builders. (you can see the relatively slow increase in starts in the south via the report above)
Credits: equity research division of Credit Suisse (http://http://www.credit-suisse.com/)
