September New Housing Starts Up, Builder Confidence Is Not
If nothing else, recent data seems to reflect the ongoing mixed signals from the housing market. According to U.S. Census Data privately-owned housing units were at a seasonally adjusted annual rate of 1,018,000, which is 1.5 %above the revised August, 2.5% above September 2013. Meanwhile, from it's forward-looking survey of builders, confidence dropped five points.
After four consecutive monthly gains, builder confidence in the market for newly built single-family homes fell five points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. “We are seeing a return to the mid-50s index level trend established earlier in the summer, which is in line with the gradual pace of the housing recovery,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del., in a news release from the NAHB.
However, the NAHB was more upbeat in its news about the "starts" information: For the third time this year, nationwide housing starts surpassed the million-mark. Total housing production in September rose 6.3 percent to a seasonally adjusted annual rate of 1.017 million units. Single-family housing starts were up 1.1 percent to a seasonally adjusted annual rate of 646,000 units in August, while multifamily production climbed 16.7 percent to 371,000 units
“These numbers show starts returning to levels we saw earlier this summer, where they hovered around one million units,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “We are hopeful this pattern of modest growth will continue as we close out the year.”
“September’s uptick reveals that last month’s dip in production was more of an anomaly than a market reversal,” said NAHB Chief Economist David Crowe. “I expect we will see a continued recovery as job creation grows and consumers gain more confidence in the housing market.”
Journalists for Bloomberg agreed, as reflected in this article. "Builders started work on more homes in September and American consumers this month were the most optimistic in seven years, signaling the U.S. economy will ride out a global slowdown," wrote .
Along with the housing starts, they noted that the Thomson Reuters/University of Michigan preliminary consumer sentiment index for October increased to 86.4, the strongest since July 2007.
"Gains in residential construction will help underpin the economic expansion as the recent drop in mortgage rates lifts home sales and gives builders reason to take on more projects," they wrote.
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