Housing Starts Up 23.3% Year Over Year

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Today, the US Census Bureau reported their housing start data.   While we cannot expect this rate of growth to continue,  this data for October is the best print of the cycle. Additionally the report shows that the trend of single family growth is still moving in the right direction. As always, be mindful of any new home sales or housing start print that deviates from trend up or down.

Today Census reported their housing start data

Housing starts in October 2016 were 1.323M (SAAR), 25.5 percent (+/- 12.6%)* above September 2016 estimate.

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BUILDING PERMITS Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,229,000. This is 0.3 percent (±2.0%)* above the revised September rate of 1,225,000 and is 4.6 percent (±1.4%) above the October 2015 estimate of 1,175,000. Single-family authorizations in October were at a rate of 762,000; this is 2.7 percent (±1.4%) above the revised September figure of 742,000. Authorizations of units in buildings with five units or more were at a rate of 439,000 in October.

HOUSING STARTS Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,323,000. This is 25.5 percent (±12.6%) above the revised September estimate of 1,054,000 and is 23.3 percent (±14.4%) above the October 2015 rate of 1,073,000. Single-family housing starts in October were at a rate of 869,000; this is 10.7 percent (±10.2%) above the revised September figure of 785,000. The October rate for units in buildings with five units or more was 445,000.

We saw big rebound in multifamily numbers which was lagging this year in terms of  rate of growth.

Year to date

Single family units: +10.1%
Multi-family units: -1.8%

From Calculated Risk:
http://www.calculatedriskblog.com/2016/11/housing-starts-increased-to-1323.html

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The more important trend  is growth in the single family home sector.  We need to see expansion in the sector over the next eight years in order to really see a full recovery.  I still believe that demographics for housing will get better but not until the  years 2020-2024.

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2016/11/17/new-residential-housing-starts-in-october-surprise-expectations

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For the future, keep and eye out on 4.5% mortgage rates to see if that impacts new home sales in reagard to future housing start activity.

Logan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami