September 19, 2012

Housing Start Weak, Existing Home Sales Increase

September 19, 2012

Housing Start Weak, Existing Home Sales Increase

Housing Starts (August 2012)

– Housing Starts  750,000.  Previous was revised to 733,000.  This is an increase but below expectation.

Housing Starts are in units (a 40-unit apartment building is 40 Housing Starts) and the data is Seasonally Adjusted and annualized.  The 750,000 Starts included 208,000 apartment units (5+ units in a single building) and 535,000 single family homes.

Building Permits were 803,000 units down from 811,000 in July.

The details are in this report from the Census Bureau.

We need to have 1,500,000 Housing Starts to keep pace with population growth assuming a constant Headship Ratio (number of people per household.)

Mortgage Applications  (week ended 9/14)

– Purchase Index – Week/Week -4.0%
– Refinance Index – Week/Week 1.0%
– Composite Index – Week/Week -0.2%

It is the purchase index which is tied to GDP growth and this data is negative.

Existing Home Sales  (August 2012)

Existing Home Sales – 4,820,000 Seasonally Adjusted Annualized Rate
Existing Home Sales – Month/Month  7.8%
Existing Home Sales – Year/Year  9.3%

Whatever positive news there is in today’s housing data in Existing Homes Sales.  More Existing Homes are being sold which is helping clear the inventory.  In fact if one looks at all the data you can see that the market is actually functioning.  It is not functions at a pace which is convenient for politicians or home builders but left to its own, it will work.