Housing Starts and Permits Falter (Ugh)
Just when it looked like everything was moving in the right direction for the housing market, the Department of Commerce has to come along with some not-so-great news. Today, the Department released its closely-watched monthly report on building permits and housing starts, which revealed that permits for privately-owned housing units in July dipped 1.8 percent from June to an annual rate of 560,000. Analysts had been expecting 580,000. Meanwhile, housing starts dropped one percent from June to July to an annual rate of 581,000. Analysts had predicted an increase to 600,000. The official press release from Commerce can be viewed here.
Both the building permit and housing start numbers come as a disappointment, not just because they dipped but because they stall what was starting to look like a rally. Both last month and the month before, we reported that building permits and housing starts increased markedly, beating analyst expectations.
Today’s numbers also undermine the welcome news yesterday that home builder confidence is trending up.
These conflicting signals lend credence to the prediction that when the housing bottom is reached, the market won’t simply pivot upward. Rather, activity will return gradually, and in fits and starts.
“Monthly data for housing activity are volatile but today’s nominal decline stands as a reminder that the economy is still fragile,” U.S. Under Secretary of Commerce for Economic Affairs Rebecca Blank diplomatically reminded the public in her statement on today’s numbers.
This article originally published at http://dc.urbanturf.com/articles/blog/housing_starts_and_permits_falter_ugh/1246
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