Tuesday, 20 November 2007

Starts up Permits down

From Marketwatch.com

U.S. housing starts rise 3.0% in Oct. on apartments Building permits fall 6.6%

Builders broke ground on new apartments at a faster pace in October, the Commerce Department estimated Tuesday. However, building permits fell for the fifth month in a row to the slowest pace in 14 years, pointing to less home building ahead.

New construction of U.S. houses and apartments rose 3.0% in October to a seasonally adjusted annual rate of 1.23 million in October, following three months of decline, the department said.

Estimated housing starts were higher than the 1.17 million pace expected by economists surveyed by MarketWatch. Starts in September were revised up slightly to 1.19 million.

Building permits, a leading indicator of housing construction, fell 6.6% to a seasonally adjusted annual rate of 1.18 million in October from 1.26 million in September. It's the lowest level for permits since July 1993.

Remember that both Building Permits and Housing Starts are volatile and subject to large sampling and other statistical errors. However permits are generally considered a better indicator of building fundamentals than starts, which can be heavily influenced by weather conditions. The sampling error on permits is also lower.

Add to this yesterday's news that the NAHB Homebuilders index remained at a record low of 19 in November and the outlook for Housing remains bleak over the medium term.