US Home Construction Dove in November, Stocks Flat on High Volume

US Home Construction Dove in November, Stocks Flat on High Volume

US Home Construction Dove in November, Stocks Flat on High Volume

$DIA, $SPY, $QQQ, $VXX

New-home construction in the US fell more than forecast in November after surging a month earlier to a 9-year high, indicating fitful progress in residential real estate.

Residential starts slumped 18.7% to a 1.09-M annualized rate last month after rising to a 1.34-M pace, US Commerce Department data showed Friday.

The median projection in a survey called for a 1.23-M pace in November, after rising 27.4% in October, the most since July 1982.

Building permits, a proxy for future construction, also fell last month on fewer applications to build apartments.

Even with the decline, home building so far this Quarter is running at a faster pace on average than it was in the previous Quarter and permits for single-family properties rose.

While challenged by a recent increase in mortgage rates, limited numbers of skilled workers and shortages of available lots, builder sentiment surged in December on optimism that President Elect Donald Trump will ease regulatory overhead.

Economists’ estimates in the survey ranged from 1.13 to 1.32-M after a previously reported October pace of 1.32-M pace. Starts decreased in all 4 regions last month.

The report showed a wide range for error, with a 90% chance that last month’s figure was between a 12% and 25.4% decline.

The housing starts data, while very volatile from month to month, follow other figures indicating steady improvement in residential real estate, including a surge in home builder sentiment to the highest since July 2005, according to National Association of Home Builders/Wells Fargo released Thursday.

Permits dropped 4.7% to a 1.2-M annualized rate, reflecting a 13% slide in applications for multifamily dwellings. Permits for single-family homes climbed 0.5%, the 4th straight gainer.

Construction of single-family houses dropped 4.1% to an 828,000 rate from 863,000 in October.

Groundbreaking on multifamily homes, such as townhouses and apartment buildings, decreased 45.1% to an annual rate of 262,000 after a 76% rise in October.

A boost in mortgage rates from historical lows could act as a brake on sales and construction. The average 30-year mortgage rate climbed to 4.16% in the week ended Thursday, the highest since October 2014, according to Freddie Mac data.

Friday, the major US stock market indexes finished at: DJIA -8.83 at 19843.41, NAS Comp -19.69 at 5437.16, S&P 500 -3.96 at 2258.07

Volume: Trade was extra heavy on Quad Witching Friday, with 2.14-B/shares exchanged on the NYSE.

  • Russell 2000 +20.7% YTD
  • DJIA +13.9% YTD
  • S&P 500 +10.5% YTD
  • NAS Com[ +8.6% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.37) Bullish (0.35) Bullish (0.44) Bullish (0.31)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.28) Bullish (0.25) Neutral (0.23) Bullish (0.35)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.33) Bullish (0.39) Bullish (0.25) Bullish (0.36)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Very Bearish (-0.53) Bearish (-0.46) Bearish (-0.42) Very Bearish (-0.71)

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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