Credit: Shutterstock photoAhead of the bell this Friday morning, U.S. Housing Starts and Building Permits for May results were released, and came generally in line with expectations. With a read of -0.3 percent for the month, Housing Starts are currently at an annualized rate of 1.16 million. This is below the historical average.
Building Permits - a forward indicator for future housing starts - went up 0.7 percent for the month, again in line with analyst estimates. While it's nice to see growth in the overall housing market in the springtime (when milder weather allows for more housing to be built), readings under 1 percent don't say much for the robustness of this market.
Multi-family housing had undergone a real resurgence over the past few years, but single-family housing has continued to lag; we see this represented in this morning's results as well. As it turns out, single-family housing is in relatively short supply these days at roughly 4-5 months, so there is room for housing to increase activity going forward. Whether it will or not is a different story.
Obviously, lending rules have gotten much more strict since the housing boom prior to the U.S. economic collapse in the fall of 2008. It takes a much stronger credit history to even obtain a loan to buy a home these days, and this is proving to be a hindrance for the market. Also, prices for housing supplies and labor have gotten more expensive, pushing up the prices for homes, especially in the more desirable regions of the U.S.
Futures are down slightly ahead of the bell, while both WTI and Brent crude oil prices are up a bit. The 10-year bond has dipped below 1.6 percent, but looks to be recovering at this hour.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
