Tag Archives: Housing Starts

A recent industry survey detects rising optimism in the commercial real estate and single-family housing sectors over the next few years. The survey, conducted by the Urban Land Institute and Ernst & Young, finds a consensus among analysts that the real estate market will improve as transaction volumes rise and vacancies decline. "After a prolonged period of uncertainty, we're seeing a revival of investor confidence as the economy continues to recovery," said Dean Schwanke, SVP at the Urban Land Institute.

Construction spending rose 1.2 percent month-over-month in February, according to the Census Bureau. Spending rose both in the public and private sectors. On an annual basis, construction spending was up 7.9 percent in February, reaching an annual rate of $885.1 billion. Combined, construction spending in January and February totaled $120.1 billion, which is 6.6 percent above the spending observed in the first two months of last year.

The housing recovery may be fast approaching a wall as well-located finished building lots become scarce, Fitch Ratings says in a recent analysis.

One of the most interesting results of poring through economic data reports is that the details often tell a different story than the headline. Coverage of the recent report on housing permits and starts, for example, was dominated by the increases in both metrics, suggesting a revival of the housing sector, a response some analysts suggested is due to tight inventories of existing-single family homes on the market. However, a closer look revealed a more important phenomenon.

Housing permits rose a sharp 4.6 percent to a seasonally adjusted annual rate of 946,000 in February, to the highest level since June 2008, while housing starts edged up 0.8 percent to 917,000, the Census Bureau and HUD reported jointly Tuesday. Most--almost 62 percent├â┬ó├óÔÇÜ┬¼├óÔé¼┼ôof the increase in permits came in applications to build multifamily units. While the comparisons are favorable, the June 2008 activity came in the midst of a steady decline in residential construction.

Builder confidence slipped in March to 44, the National Association of Home Builders (NAHB) reported Monday. Economists had expected the Housing Market Index to improve to 47 from February's reading of 46. Tighter inventories had been expected to improve confidence, but builder attitudes have also been weighed down by prices of new single-family homes. With the March report, the total index remained below 50 for the 83rd straight month.

The President has tried repeatedly to describe the impact of sequestration, a mandatory across-the-board cut in federal spending exempting only a small handful of social safety net programs. Despite those exemptions, a simple fact is that people will die as a result of these cuts, and lives could be changed irrevocably. The tragedy in this is not what might happen, although that's pretty severe long-term. The tragedy is both Democrats and Republicans have the means to fix it without having to resort to face-saving techniques.

As the vocabulary surrounding the housing market switches from crisis to recovery, the NAHB has deep concerns about factors currently limiting the recovery.

Economic data for the week ending February 22--particularly for housing--was less than encouraging. A small increase in existing-home sales was the only bright spot, but that was weighed down by another drop in the median price of existing single-family homes to their lowest level in 10 months. The word "another" is critical because it means the drop in inventory in December did not result in higher prices. Indeed, the supply of homes for sale fell again in January, this time to the lowest level in 13 years.

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