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September Housing Permits, Starts at Four-Year Highs

Housing starts and permits jumped in September to their highest levels since July 2008, the ""Census Bureau and the Department of Housing and Urban Development"":http://www.census.gov/construction/nrc/pdf/newresconst.pdf reported jointly Wednesday.


Housing starts jumped 15.0 percent from August to a seasonally adjusted annual rate of 872,000, while permits improved 11.6 percent to 894,000. The percentage increase in starts was the highest since March 2011 and the gain in permits the largest since July 2008.

Economists had expected much smaller gains, forecasting September starts at 765,000 and permits at 810,000. The September improvements came in the same month in which the Housing Market Index, the builder confidence measure tracked by the National Association of Home Builders, jumped three points to 41, a six-year high. The sales index for October, released Tuesday, inched up to 42.

Total housing completions in September nudged up 0.4 percent to 683,000, the highest level since January 2010.

August permits and starts were revised upward, permits from 803,000 to 801,000 and starts from 750,000 to 758,000.

Single family starts, which had reached a two-year high in August, improved again to 603,000├â┬ó├óÔÇÜ┬¼├óÔé¼┬Øthe highest level since September 2008├â┬ó├óÔÇÜ┬¼├óÔé¼┬Øfrom 543,000 (revised up from 535,000).


September permits were up 45.1 percent from one year earlier, the strongest year-over-year increase since October 1983. Starts were up 34.8 percent, the strongest year-over-year gain since February of this year.

The month-to-month report reinforced an improving longer term trend. In the first nine months of this year, total starts have averaged 745,000 compared with 590,000 in the same period last year. Single family starts averaged 518,000 in the first nine months of this year compared with 421,000 in the same period in 2011.

Permits have also surged, averaging 770,000 per month thus far this year compared with 602,000 in the January-September period last year. Permits for single family homes averaged 491,000 each month this year compared with 410,000 in the first nine months of 2011.

Completions too are up, averaging 625,000 for the first nine months this year compared with 583,000 in the same period in 2011. Single family completions averaged 463,000 thus far in 2012 compared with 443,000 in the first nine months last year. New home sales have averaged 362,000 this year compared with 299,000 in 2011, so the gap between sales and completions (144,000 per month in 2011 and 101,000 in 2012) is shrinking.

Single family starts represented 69.2 percent of the total in September, but there has been a subtle shift in housing activity. Single family starts thus far this year averaged 69.2 percent of all starts, down from 71.5 percent in the first nine months of 2011.

Total starts rose in three of the four census regions, improving 75,000 in the South, 34,000 in the West and 9,000 in the Midwest while dropping 4,000 in the Northeast. Single family starts also improved in the South, West, and Midwest while falling in the Northeast.

Total permits rose month-over-month in all four regions, as did single family permits.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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