{"id":1625,"date":"2019-11-19T10:49:16","date_gmt":"2019-11-19T15:49:16","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1625"},"modified":"2019-11-19T10:49:16","modified_gmt":"2019-11-19T15:49:16","slug":"october-housing-starts-and-permits-3","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1625","title":{"rendered":"October Housing Starts and Permits"},"content":{"rendered":"\n

KEY DATA:<\/strong>  Starts: +3.8%; 1-Family: +2%; Year-to-Date:\n-0.6%; Permits: +5%; 1-Family: +3.2%; YTD: +2.4%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cHousing continues to wander around aimlessly,\nfaltering one month, rising the next but essentially going nowhere.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  With the economy decelerating, we need to find\nsome sector that will lead us back toward strong growth.  Well, it doesn\u2019t look like that will be the\nhousing market.  Yes, housing\nstarts rose solidly in October.  There\nwas a modest increase in single-family activity and a more robust gain in the\nalways-volatile multifamily component<\/em><\/strong>. \nBut what caught my eye was the year-to-date numbers.  After ten months, home construction is\nslightly down compared to the same period in 2018.<\/em><\/strong>  The year started out quite slowly but it\nhasn\u2019t accelerated sharply enough to overcome the early weakness.  Will housing construction pick up?  The data seem to argue that.  Permit requests rose again and hit their\nhighest level since May 2007.  They have\nbeen running above starts for most of the year and are nearly seven percent\nabove last year\u2019s 10-month total. \nBuilders just don\u2019t spend money on permits for the fun of it.  The number of homes permitted but not started\nis high, we should imply increasing starts going forward.<\/em><\/strong><\/p>\n\n\n\n

In addition, The National Association of Home Builders\u2019\nIndex came out yesterday and while it edged down in November, optimism remains\nnear the level reached in 2005, the high point in the housing bubble.  Current and future sales are expected to be\nstrong.<\/em><\/strong>  The combination of\nrising permit demand and high builder confidence argue for a rise in home construction.  However, I have been saying that for months\nand the upward trend, if there is one, has been fairly modest.  MARKETS AND FED POLICY IMPLICATIONS:<\/strong>The\neconomy seems to be settling into a trend level growth pattern of something in\nthe 2% range.  An improvement in home\nconstruction would help offset what is likely to be a slowdown in consumption\nto a more sustainable pace.<\/em><\/strong>The\nmajor unknown remains the trade tensions.<\/em><\/strong>  That is affecting business confidence and\ntherefore capital spending as well as trade flows.  The trade \u201cdeal\u201d that is being negotiated\ndoes not look like it will be much more than an attempt at placating both\nparties.  Each will get something but it\nis not being billed as a major agreement and it has to be viewed that way when considering\nthe impact on the economy.  At best,\nconditions will move back toward where they were before the war started<\/em><\/strong>\nbut it is doubtful that trade flows will reach levels we saw previously.  It is, as stated, only an initial, partial\ndeal.  I am sure it will be billed as the\ngreatest trade deal in the history of the nation, but my job is to analyze the\nreal work impacts and from the little we know, that are not likely to be\ngreat.  We should see some additional\ncapital spending as some companies decide the worst is behind us, but given the\nglobal economic slowdown, there is little reason to expect any extended surge.<\/em><\/strong>  In addition, that deal does nothing to the\ntariffs on European products.  So, a\npartial deal might lead to higher equity prices but not necessarily move the\nneedle much when it comes to economic growth.<\/em><\/strong>  That said, it would bolster the Fed\u2019s new\nstance that it has won the war on recession and doesn\u2019t need to do anything\nunless conditions change significantly.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Starts: +3.8%; 1-Family: +2%; Year-to-Date: -0.6%; Permits: +5%; 1-Family: +3.2%; YTD: +2.4% IN A NUTSHELL:  \u201cHousing continues to wander around aimlessly, faltering one month, rising the next but essentially going nowhere.\u201d WHAT IT MEANS:  With the economy decelerating, we need to find some sector that will lead us back toward strong growth.  Well, … Continue reading October Housing Starts and Permits<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1625","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1625"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1625\/revisions"}],"predecessor-version":[{"id":1626,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1625\/revisions\/1626"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}