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.
More Americans are looking to purchase homes as the job market has improved, but the supply of properties for sale has been relatively low even with additional construction. The increase in construction starts points to greater sales this year even though mortgage rates have climbed upward from recent lows, making monthly housing payments higher and hurting affordability.
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.
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
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