Seasonality Bites Housing

As we warn year after, Housing is extremely seasonal. This part of the calendar is expected to slip straight thru to January — mostly in EHS, but we will also see it in New Homes Sales, Permits and Starts.

Add to this the sunsetting government subsidies — $8,000 tax credit for first-time home buyers, and the eventual removal of ZIRP — and you have a recipe for slowing Permits, Starts, and Sales. Yesterday saw the National Association of Home Builder’s confidence index declined for the month of October.

Commerce Data:

BUILDING PERMITS
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 573,000. This is 1.2 percent (±1.8%)* below the revised August rate of 580,000 and is 28.9 percent (±2.2%) below the September 2008 estimate of 806,000.

Single-family authorizations in September were at a rate of 450,000; this is 3.0 percent (±1.0%) below the revised August figure of 464,000. Authorizations of units in buildings with five units or more were at a rate of 104,000 in September.

HOUSING STARTS
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 590,000. This is 0.5 percent (±9.9%)* above the revised August estimate of 587,000, but is 28.2 percent (±6.7%) below the September 2008 rate of 822,000. Single-family housing starts in September were at a rate of 501,000; this is 3.9 percent (±9.3%)* above the revised August figure of482,000. The September rate for units in buildings with five units or more was 78,000.

HOUSING COMPLETIONS
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 693,000. This is 10.2 percent (±10.4%)* below the revised August estimate of 772,000 and is 39.6 percent (±5.7%) below the September 2008 rate of 1,148,000. Single-family housing completions in September were at a rate of 464,000; this is 8.3 percent (±14.3%)* below the revised August figure of 506,000. The September rate for units in buildings with five units or more was 210,000.

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Source:
NEW RESIDENTIAL CONSTRUCTION IN SEPTEMBER 2009
http://www.census.gov/const/newresconst_200909.pdf

Homebuilder Confidence in U.S. Unexpectedly Decreases
Shobhana Chandra
Bloomberg October 19, 2009
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atsuzv2LjY8o

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