US Housing Starts +3%, Led by Single-family Homes

US Housing Starts +3%, Led by Single-family Homes

US Housing Starts +3%, Led by Single-family Homes

$DIA, $SPY, $QQQ, $VXX

US home builders broke ground on new homes at a faster pace in February, signalling developers expect solid sales growth this year despite higher mortgage rates.

Housing starts rose 3% last month to a seasonally adjusted annual rate of 1.3-M, the US Commerce Department said Thursday. Almost all of those gains came from construction of single-family houses, which rose 6.5%. Construction of apartment buildings fell 7.7% in February.

Housing starts are running 7.5% higher than they did during the 1st 2 months of Y 2016. Builders last year started the most new homes since Y 2007, the year the Great Recession began as the housing market began to teeter.

Construction surged last month in the West, offsetting declines in the Northeast, Midwest and South that were largely caused by a decline in apartment building starts.

Growth in home building also appears to be tempered.

Building permits, an indicator of future home construction slipped 6.2% in February to an annual rate of 1.2-M.

Builders have been adding supply to the market, just not enough to address the tight inventory of existing homes that make up the bulk of the real estate market.

The National Association of Realtors (NAR)  has reported that the number of existing homes on the market is near its lowest level since Y 1999, while the inventory of new homes on the market is near an 8-year high.

Demand among home buyers has been strong as the unemployment rate has dipped to 4.7%. Yet buyers will likely borrow at higher rates than last year, a factor that could restrict the extent of price and sales growth.

The average 30-year fixed rate mortgage had a 4.21% interest rate, mortgage buyer Freddie Mac said last week. This marks an increase from a 52-wk low rate of 3.41%.

Thursday, the US major stock indexes finished at: DJIA -15.55 at 20934.55, NAS Comp +0.71 at 5900.76, S&P 500 -3.88 at 2381.36

Volume: Trade on the NYSE came in at 955-M/shrs exchanged, below average.

  • NAS Comp +9.6% YTD
  • S&P 500 +6.4% YTD
  • DJIA +5.9% YTD
  • Russell 2000 +2.1% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.35) Neutral (0.19) Bullish (0.38) Very Bullish (0.50)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.44) Bullish (0.29) Very Bullish (0.50) Very Bullish (0.54)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.47) Bullish (0.48) Very Bullish (0.50) Bullish (0.42)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.39) Bearish (-0.38) Bearish (-0.43) Bearish (-0.38)

 

Stay tuned….

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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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