Pleasant Surprise: Housing Starts and Building Permits Surge

• June 16th 2009

by Will Smith

Unexpectedly positive news on the national housing front came today as the Commerce Department released statistics on May’s housing starts and building permits, both of which beat estimates by analysts.

According to Bloomberg, housing starts had been predicted to reach an annualized 485,000 but actually hit 532,000, a nice 17 percent jump over April’s number of 454,000. Building permits were projected to rise to 508,000 from 498,000 but they actually rose to 518,000. Building permits are seen as a leading indicator of the direction of the housing market.

Today’s stats were welcomed by analysts, who interpreted them as a strong sign that the elusive bottom of the national housing market is quite close or has even already arrived. Still, many caveated their optimism with the point that arriving at the bottom does not mean things are back to normal. The BBC quoted analyst Zach Pandl of Nomura Securities:

“This starts report is actually very encouraging. Single-family housing starts, where the core of the inventory problem is in the housing market, are really coming back at a good pace.

I would emphasize though that housing activity does remain at extraordinarily low levels, we really need to come back strongly from here.”

The official release from the Commerce Department is here.

This article originally published at https://dc.urbanturf.com/articles/blog/pleasant_surprise_housing_starts_and_building_permits_surge/1033.