August housing starts rose 0.9% m/m to 891,000 units [896,000
forecast], while permits sank 3.8% m/m to 918,000 units [945,000
expected]. There were downward revisions to starts in June
and July. The bright spot rests in total starts rising 19.0%
y/y and a 7.0% m/m gain in single family starts. Single
family starts are 16.9% above a year ago. Weakness in
the August starts data was a function of multi-family which fell
11.1% m/m, but rose 24% y/y.
August Single family permits rose 3.0% m/m to 627,000 units and are
20.6% ahead of last year.
There were 654,000 privately owned homes under construction in
August up 2.2% m/m and 31.9% y/y. There is a building
inventory of unfinished homes which is not too alarming as the
inventory of new homes is unusually low.
Further, there was little in the September NAHB survey released
yesterday that suggests material change in the industry. The
Composite Index was unchanged to a revised 58, while current sales
were flat at a healthy 62 and traffic flow rose 1 to a climbing
47. Future sales did drop 3 to 65, but are up from 51 last
year. I remain surprised that the rise in mortgage rates has
not had a more negative impact on the NAHB data.
On a side note, the MBA purchase index rose 2.5% last week to
188.1. It has stabilized in recent weeks off the August 9
low of 182.7. It is still down almost 25% from its may high.
: Do you think housing stocks via the Home Construction ETF
(ITB) can move over the 200 day average and continue with their
ISHARS-US HO CO (ITB): ETF Research Reports
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SPDR-SP HOMEBLD (XHB): ETF Research Reports
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