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Total
housing starts retreated
in October, to a seasonally adjusted and annualized rate (SAAR) of 1.009
million units. That level was 29,000 fewer (-2.8%) than September’s 1.038
million units. All of the decrease in total starts occurred in the multi-family
component (-57,000 units or 15.4%); single-family starts rose by 28,000 units (4.2%).
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The
year-over-year percentage change in total starts slowed in October (+7.7%).
Single-family starts were 16.3% above their year-earlier level; the more
volatile multi-family component fell to 6.8% below its September 2013 level. On
a year-to-date basis, all components are above levels seen during the same months
in 2013.
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Completions
decreased by 85,000 units (8.8%) in October, to 881,000 units SAAR. Over half of
the decrease occurred in the single-family component (-47,000 units or 7.4%); the
multi-family component shrank by 38,000 units (-11.4%). Total completions were 8.7%
above their year-earlier level. On a year-to-date basis, total completions are
16.3% higher than the same months in 2013.
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Total
permits were the bright spot in October, increasing by 49,000 units (4.8%), to 1.080
million SAAR. Over eight-tenths of the increase occurred in the multi-family
component (40,000 units or 10.0%); single-family permits edged higher (9,000
units or 1.4%). October total permits were 2.7% above year-earlier levels; on a
year-to-date basis, total permits were 3.5% higher than the same months in 2013.
It
appears the slide in the rate of annual growth in total permits seen since late
2012 has ended, but it is still too early to tell whether the trend is poised
to turn back up. That may be the case, given the latest National Association of
Home Builders/Wells Fargo Housing Market
Index (HMI) jumped four points in November (to 58), one point shy of
September’s nine-year high of 59. An index value above 50 means more builders
feel the market is good than feel it is poor.
“Growing
confidence among consumers is what’s fueling this optimism among builders,”
said NAHB Chairman Kevin Kelly. “Members in many areas of the country continue
to see increasing buyer traffic and signed contracts.”
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The foregoing comments represent the
general economic views and analysis of Delphi
Advisors, and are provided solely for the purpose of information, instruction
and discourse. They do not constitute a solicitation or recommendation
regarding any investment.
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