Housing continues to improve

Housing continues to improve as Oct Starts totaled 894k, 54k more than expected, the most since July ’08 and up from a revised 863k in Sept (from 872k). The improvement m/o/m though was all in multi family as starts there rose to 300k from 268k. Single family starts fell 1k but after jumping by 57k in Sept. While Permits fell by 24k from Sept to 866k, the level is still around the best also since July ’08. With respect to construction jobs, housing completions totaled 772k, more than 100k below starts, thus providing opportunities for workers to find new work after finishing a home. As seen, the housing industry is getting better to the benefit of the balance sheets of the American consumer and banking system and we all hope this continues. The shrinking supply of existing homes is leading more to new construction. Housing has bottomed but I still think it’s important to keep the recent improvement into perspective so as not to get carried away as the recovery I believe will still be in fits and starts. Housing starts at 894k is near where they were at the depths of the 1981 and 1991 recessions and 60% below the peak in Jan ’06.

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