USA new housing data continues to show a new housing sector on life support in September 2010. The headlines:
BUILDING PERMITS: Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 539,000. This is 5.6 percent (±1.4%) below the revised August rate of 571,000 and is 10.9 percent (±2.3%) below the September 2009 estimate of 605,000. Single-family authorizations in September were at a rate of 405,000; this is 0.5 percent (±1.3%) above the revised August figure of 403,000. Authorizations of units in buildings with five units or more were at a rate of 111,000 in September.
HOUSING STARTS: Privately-owned housing starts in September were at a seasonally adjusted annual rate of 610,000. This is 0.3 percent (±10.3%) above the revised August estimate of 608,000 and is 4.1 percent (±12.0%)* above the September 2009 rate of 586,000. Single-family housing starts in September were at a rate of 452,000; this is 4.4 percent (±13.9%)* above the revised August figure of 433,000. The September rate for units in buildings with five units or more was 150,000.
HOUSING COMPLETIONS: Privately-owned housing completions in September were at a seasonally adjusted annual rate of 648,000. This is 7.3 percent (±14.3%) above the revised August estimate of 604,000, but is 10.1 percent (±13.6%)* below the September 2009 rate of 721,000. Single-family housing completions in September were at a rate of 501,000; this is 4.8 percent (±14.2%)* above the revised August rate of 478,000. The September rate for units in buildings with five units or more was 138,000.
Econintersect continues to use unadjusted data in its analysis.
New housing data must be adjusted for seasonal variation. No matter how the data is reviewed (permits issued, housing starts, housing completions) – it is down year-over-year. Somehow, US Census has found seasonal adjusting methodology which can show improvements in data even though the YoY downtrend has remained consistent since 2006.
Let there me no mistake – there was NO improvement in new housing construction EXCEPT in housing structures with 5 or more units (apartments) which over the past few months have been showing a more healthy growth cycle.
Econintersect believes with the abundance of existing home sales, that it is better for existing home values that new home construction remains at post-WW2 lows. This however continues to be a negative factor for GDP.