Tag Archives: Residential Construction

It's been two weeks since the dreaded sequester took effect, and so far, the only casualty has been the White House tour. There actually have been some positives, with both parties presenting budgets. However, both the GOP budget and the Democratic plan have one major similarity: Each is dead on arrival and destined to at best be a one-house budget, which leaves the country back where it was. Setting a target for practical balance would bring us closer to reducing the deficit and with less pain.

Construction spending came in at a seasonally adjusted annual rate of $883.3 billion January, a 2.1 percent monthly drop, the Census Bureau reported Friday. January's figure sits 7.1 percent above January 2012's spending estimate of $824.7 billion. December's estimate was revised upward to $902.6 billion from an originally reported $885.0 billion. Residential construction spending in the private sector was an estimated $304.6 billion, essentially flat month-over-month and up 22.0 percent year-over-year.

Real gross domestic product (GDP) grew 0.1 percent in the fourth quarter, the Bureau of Economic Analysis (BEA) reported Thursday. Last month, in the advance GDP release, BEA had reported the nation's economy contracted by 0.1 percent, the first "negative growth" since the end of the Great Recession in mid-2009. Economists had expected the turnaround, but to a stronger 0.5 percent growth rate. BEA said the revision is based on more complete data than were available for the "advance" estimate issued last month.

New home sales jumped 15.6 percent in January--the strongest gain in 20 years--to a seasonally adjusted annual rate of 437,000, the Census Bureau and HUD reported Tuesday. The sharp increase in sales combined with steep price drops suggests builders are taking aggressive actions to pare inventories. Housing completions (as reported separately by Census and HUD) routinely exceed new home sales, and the gap between completions and sales has been widening.

Fannie Mae's Economic & Strategic Research Group is maintaining its outlook for slow and steady growth in 2013.

Housing starts plunged 8.5 percent in January to a seasonally adjusted annual rate of 890,000, the Census Bureau and HUD reported jointly.

Well housing activity remains near historical lows, Freddie Mac is taking a more optimistic view: There's still plenty of room to grow. This glass-half-full viewpoint was reflected in the GSE's forecast for housing in 2013, especially for housing starts, which are projected to increase to 950,000 units this year--22 percent higher than 2012 levels. The GSE also expects prices to increase 3 percent in 2013 and 2014, while sales are forecast to rise to an annual rate of 5.45 million and 5.80 million, respectively.

Economic activity "expanded" in the closing weeks of 2012, the Federal Reserve said in its periodic Beige Book released Wednesday, reflecting a slow but steadily declining unemployment rate and low rates of inflation--conditions the Fed said would have to be met before it raises interest rates. According to the report, "real estate activity has expanded or held steady in 11 Districts for existing home sales and leasing; eight Districts for residential construction; 11 Districts for nonresidential sales and leasing; and nine Districts for nonresidential construction."

President Obama opened a big hole in his White House by tapping Jack Lew to replace Timothy Geithner as Secretary of the Treasury, leaving empty--for the moment--the role of chief of staff. It's not the first time the president has looked to change nameplates of those who already worked for him. Strong managers, according to Harvard Business School theory, can move from one discipline to another without specific expertise, and Harvard Law alum Obama apparently picked up something beyond a law degree while in Cambridge.

According to commentary from Daniel Dektar, chief investment officer at Smith Breeden Associates, all the fundamentals are in place for a housing upturn - if pent-up demand can actually translate into buyer interest.