Ladies and gentlemen, the U.S. housing market really is back

Housing starts came in at a post-2008 high


(Kevin Lamarque/Reuters)

To recap:

  • December housing starts came in at a seasonally adjusted on a annual rate of 954,000, an increase of over 12 per cent from November and up nearly 37 per cent from December of last year, the U.S. Department of Commerce said today. The figure was far higher than the consensus forecast of 890,000 starts and the strongest reading since mid-2008. It also represents the largest monthly jump since May 2006.
  • Building permits for private residential construction were at a seasonally adjusted annual rate of 903,000, up a small tick from November, but nearly 29 per cent above December 2011.

What the analysts are saying:

Today’s release is further confirmation that the residential real estate market is back to being a key engine of growth for the U.S. economy, writes RBC’s David Onyett-Jeffries. The real estate comeback is starting to show in the labour market as well, notes TD’s Michael Dolega, with construction employment up by 30,000 in December in a the sector that has shed around two million jobs since 2006-2007 . Although the modest increase in building permits foreshadows a slowdown in new construction in the next few months, Dolega predicts the annual pace of home construction will reach one million by the end of the year providing jobs for half a million Americans.


Ladies and gentlemen, the U.S. housing market really is back

  1. Too early to say if American housing market is back or not. The Fed’s QE 3 focused on mortgage bonds so housing market is being torqued by Fed’s purchase of debt and annual numbers, not just Dec’s, show how far US has fallen.


    Average housing starts over the period 1990-2011 were almost 1.4 million. At 780 thousand, 2012 construction starts were 43% below this long-term average. Aside from the even-worse years of 2009-2011, construction starts in 2012 were at their lowest level since 1959, when the Census began reporting housing starts.

    Construction is sprinting ahead in some metros and struggling in others …. Three Texas metros–Austin, Houston, and Dallas–were also among the top 10 markets for construction activity. None of the top construction markets are in the Northeast or Midwest.


  2. Inflated by Fed funny money in the form of record low interest rates and mass money printing. Ah yes, worked the last time after all.

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