Residential construction permits and housing starts both increased in November reaching a 12-year high, according to data released Tuesday by HUD and the U.S. Census Bureau. For all those who are mulling over this news with caution, wondering what this means for the future of the market and whether we’re on the brink of another recession, Jim Cramer from CNBC’s Mad Money has some advice: “Don’t try to overthink this economy, people.”
Cramer added, the latest housing stats are evidence of recovery from the last recession not a harbinger of a new one.
“Good news is actually good news, not a sign that things have gotten overheated and the end is nigh,” Cramer, who is also co-founder of TheStreet.com, said Tuesday.
Cramer said the moment the report was released, his Twitter feed exploded with comments that we are about to relive the housing crisis of 2008. He staunchly argued the opposite.
“It’s not a sign that we’re headed for another recession, for heaven’s sake,” Cramer insisted. “It’s a sign that we’re finally, finally, finally recovered from the last one.”
Cramer said given population growth, we should expect more homebuilding, and the current numbers are only “back to where they were.” In fact, Cramer said the numbers are “pathetic” given the rate of population growth.
Cramer also pointed out that good news for housing is good news for the economy because “housing punches above its weight.” Beyond homebuilders and banks, increasing housing starts will benefit retailers, real estate professionals, and other housing-related services.
Building permits rose 1.4% over the month in October and are up 11.1% from a year ago, according to the report. Permits for single-family homes rose 0.8% over the month.
Housing starts rose 3.2% over the month and are up 13.6% over the year.
Meanwhile, housing completions took a different direction, falling 6.6% over the month but still coming in 7.3% above their level last year.
In total, there were 1.482 million building permits authorized in November and 1.365 million housing starts.