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"Housing starts have now risen 21.1% in the past year." (up 2.8% in January.)

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Home » Discuss » General Discussion: Presidency

Clio the Leo

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Wed Feb-17-10 09:15 AM
Original message

"Housing starts have now risen 21.1% in the past year." (up 2.8% in January.)

Housing starts show signs of life in January
New construction rises 2.8% to highest level since July

By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- Housing starts showed signs of life in January, rising to their highest level in seven months, according to Commerce Department data released Wednesday.

Starts rose 2.8% to a seasonally adjusted annual rate of 591,000, the highest level since July.

Starts were in line with the forecasts of economists surveyed by MarketWatch.

Housing starts for December were revised higher. In December, starts were revised to an annual rate of 575,000, up from 557,000 previously

Building permits -- a separate, less-volatile measure of new construction -- fell 4.9% last month to a seasonally adjusted annual rate of 621,000. This follows a 10.9% jump in December.

Permits for single-family homes, considered by many analysts to be the key number in the report, rose 0.4% to a seasonally adjusted annual rate of 507,000.

Starts of single-family homes increased 1.5% to an annual rate of 484,000.

Housing starts have now risen 21.1% in the past year, the largest year-over-year increase since April 2004. Building permits are up 16.9% in the past year, the largest year-over-year gain since May 2004.

Housing starts have stopped plunging but have yet to show a sustained uptrend. In the past, housing has led the economy out of recessions but economists do not see that happening after this severe downturn.

Competition from foreclosed homes has weighed on sales and some analysts believe that banks are holding a shadow inventory of distressed homes on their books.

However, the government has stepped in an extended the first-time home buyers' tax credit. Analysts believe this should boost housing starts as spring arrives.

Indeed, the National Association of Home Builders said Tuesday that its builder sentiment index rose to a three-month high.

(more)
http://www.marketwatch.com/story/housing-starts-show-signs-of-life-in-jan-2010-02-17?reflink=MW_news_stmp

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proudohioan

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Wed Feb-17-10 09:19 AM
Response to Original message

1. What exactly are "housing starts"? n/t

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Clio the Leo

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Wed Feb-17-10 09:21 AM
Original message

here...

http://www.investopedia.com/university/releases/housingstarts.asp

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proudohioan

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Wed Feb-17-10 09:32 AM
Response to Original message

3. Oh, Ok; thank you for clarifying....

I wasn't sure what exactly housing starts were.

A friend of mine has been unemployed for almost a year; he's in construction and should be happy to hear this.

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NightWatcher

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Wed Feb-17-10 09:21 AM
Response to Original message

2. I see, and raise. New wave of foreclosures by end of 2010 is feared

http://www.latimes.com/business/la-fi-mortgage-mods17-2010feb17,0,7573498.story

About 4 million U.S. homeowners are 90 days or more delinquent on their loans or in foreclosure proceedings, Moody's Economy.com says. A federal loan modification program is helping a relative few.

Reporting from Washington - Experts fear that a new wave of foreclosures will hit this year as prolonged unemployment makes it difficult for millions of homeowners to pay their mortgages -- and many of them aren't likely to get much help from a federal program aimed at keeping them in their houses.

Banks participating in the Home Affordable Modification Program, announced a year ago this week by President Obama, have been slow to turn temporarily reduced mortgage payments into permanent ones.

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proudohioan

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Wed Feb-17-10 09:40 AM
Response to Reply #2

5. And then, on the other hand.....

we have a huge inventory of existing homes......

Why are we building new homes?

Yeah, I know, rhetorical question! It's much easier to build a home with the granite counter tops, stainless steel appliances and Travertine marble floors already in place....... (guess I've seen too many whiny "House Hunter's" episodes.)

Which brings me to: why are Travertine marble floors so "en vogue"? I'd think that they would be a pain in the ass to maintain????

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AllentownJake

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Wed Feb-17-10 10:26 AM
Response to Reply #5

13. In order to create jobs

You need the housing market to rebound in new home construction.

That is why the administration is interested in trying to pump as much money into that market as possible.

It is kind of a fools errand at this point.

Supply and Demand will always eventually win. They can blow a small bubble, but there isn't enough demand (people who are employed) to support the existing inventory, let alone the new inventory they are trying to put on the market, eventually things come back to Earth.

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proudohioan

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Wed Feb-17-10 10:29 AM
Response to Reply #13

14. Agreed. It's a vicious cycle at this point....

and which comes first; the chicken or the egg?

t.

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AllentownJake

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Wed Feb-17-10 10:31 AM
Response to Reply #14

16. Well they could help the existing homeowners

Stabilize the foreclosure market, keep people in their houses, and than work on job creation, which will stimulate demand and new home construction eventually, however, doing things the sensible long term growth and health way, has not been an interest of this nation since 1980.

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proudohioan

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Wed Feb-17-10 10:31 AM
Response to Reply #13

15. However, you didn't answer my REAL question....

which is what's up with the Travertine marble flooring????

:sarcasm:

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AllentownJake

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Wed Feb-17-10 10:32 AM
Response to Reply #15

17. Generation X vanity

:rofl:

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leftofcool

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Wed Feb-17-10 10:41 AM
Response to Reply #15

20. It really is nice. I wouldn't have it but it is gorgeous

I prefer wood floors and plain old tile in the kitchen.....easier to clean up.

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proudohioan

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Wed Feb-17-10 10:52 AM
Response to Reply #20

22. That would be my preference as well...

anything that makes life easier is a good thing in my book!

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TwilightGardener

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Wed Feb-17-10 11:40 AM
Response to Reply #20

28. Honestly, having put in wood, laminate, tile, and vinyl--my number one

Edited on Wed Feb-17-10 11:41 AM by TwilightGardener

choice for kitchen/bath is humble old vinyl. I have come to really, really hate grout. Don't want to worry about wood and laminate in wet areas, either.

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earthside

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Wed Feb-17-10 09:35 AM
Response to Original message

4. Re-inflating the housing bubble.

There is an existing home inventory of 3.29 million.

The last thing we need is a re-inflation of the housing bubble. But I don't hear anyone in Washington or on Wall Street talking about how to redirect home builders into other businesses.

So, with foreclosures still expected to get much worse this year, it seems to me that this kind of report actually demonstrates the chaos still plaguing the economy.

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karynnj

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Wed Feb-17-10 10:23 AM
Response to Reply #4

12. The building and inventory may be in different areas or different income strata

i don't know the main areas where there is building, but I have seen at least one areas where the number of boarded up houses seemed to be at least 20% of the houses on the block. (South side of Chicago) Now, if there is a need for a middle class home in Chicago, the fact that these houses exist is irrelevant.

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AllentownJake

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Wed Feb-17-10 10:36 AM
Response to Reply #12

18. That is correct

and people need to remember that everything literally stopped in the last months of 2008. So a 21% increase, while looking like a huge number needs to be evaluated on the number it was originally based on.

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karynnj

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Wed Feb-17-10 10:59 AM
Response to Reply #18

24. Exactly, with that low point anything looks good

Believe me, I don't think everything is rosy again - it's not, and it will be a long time before it is even "fair" much less "good" - but we're going in the right direction.

I do think that something needs to be done for the innercities. I had read of some of the worst areas - there was a good NYT magazine cover story, but I really was stunned to see the number of boarded up houses in that area. I doubt that normal economic recovery will work. There has to be a way to assist homeless people in those areas - maybe trading low rent (to the city which would have to buy these properties) for cleanup. Fixing the homes would likely generate a lot of jobs for people in the area.)

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AllentownJake

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Wed Feb-17-10 11:02 AM
Response to Reply #24

25. I'm not as hopeful overall

Edited on Wed Feb-17-10 11:04 AM by AllentownJake

I see some really big issues going on when the Feds ends quantitative easing in the second half of 2010 and the state governments go for another round of budget cuts as they attempt to balance their budgets and prevent themselves from defaulting.

I could see all the public sector stimulus created jobs disappear in the 2011 budgets, and the federal government doesn't have that many eager buyers for their debt right now to finance a second go around.
China has already announced that it will not purchase state or municipal debt in 2010, so the market for the states to sell their debt has shrunk.
They could monetize the debt, but that will come with its own issue.

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karynnj

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Wed Feb-17-10 11:16 AM
Response to Reply #25

27. I agree with everything you see here

The biggest problem is that Democrats may buy the argument that if they deficit spend they will lose.

You can already see the public sector stimulus protected jobs starting to be cut. In NJ, Christie is slashing the budget. Many of his cuts are the ones already identified by Corzine, but deeper. There are already articles saying that the school cuts, that were feared last year, but avoided will happen this year.

I do think we are in a better position than a year ago, but there are clearly no easy solutions and, even in this mess, there is still the incredible greed on the part of very rich. It is amazing that, even now, they get any traction on keeping estate taes low (or keeping them eliminated).

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AllentownJake

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Wed Feb-17-10 12:08 PM
Response to Reply #27

30. I think we are in a worse situation

Politically speaking, there are going to be losses in 2010. Therefore action will be harder to initiate.

I blame the 9 month HCR debate.

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asdjrocky

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Wed Feb-17-10 09:42 AM
Response to Original message

6. In my neighborhood rich people are buying the houses that poor people lose.

Then they rent them out at twice what the payment is to other poor people.

This is going great so far.

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AllentownJake

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Wed Feb-17-10 09:53 AM
Response to Original message

7. That could not be good

Edited on Wed Feb-17-10 09:59 AM by AllentownJake

The last thing you want with a plethora of inventory on the market is more housing starts.

Supply and Demand, more Supply, less people employed = less demand = lowered pricing on existing housing, equal more strategic defaults.

Depends on where these "starts" are.

The housing market is regional. I wouldn't want to see an increase in housing starts in Nevada, Florida, or California, but would be fine about an increase in starts in Iowa.

When you have a bubble, you need things to return to reality, the government could be issuing more Pets.com stock after the tech bubble crash with its moves.

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asdjrocky

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Wed Feb-17-10 09:56 AM
Response to Reply #7

9. Developers are getting rich.

That's a plus.

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AllentownJake

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Wed Feb-17-10 09:57 AM
Response to Reply #9

10. Well after they took the bath in 2008

Well they didn't take the bath, the complex legal entities they have built to keep debt from reaching their main companies took a bath.

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asdjrocky

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Wed Feb-17-10 09:59 AM
Response to Reply #10

11. Capitalism.

Big government for the rich, small government for the poor.

Get with the program Jake.

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TwilightGardener

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Wed Feb-17-10 09:55 AM
Response to Original message

8. That is good news.

Edited on Wed Feb-17-10 09:56 AM by TwilightGardener

Edit to add: I'm torn between getting a deal on a pre-existing, or building new.

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Jennicut

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Wed Feb-17-10 10:36 AM
Response to Original message

19. This might have something to do with the first time homebuyer tax credit.

"It is important to note that many home builders started a few extra spec homes in January hoping to have them completed and sold before the home buyer tax credit expires. It takes about six months to build an average home, so the builders couldn't wait to start construction until the expected buying rush in April since they have to close by the end of June.

As I've noted before, this low of starts is both good news and bad news. The good news is the excess housing inventory is being absorbed - a necessary step for housing (and the economy) to recover.

The bad news is economic growth will probably be sluggish - and unemployment elevated - until residential investment picks up."

http://www.npr.org/blogs/thetwo-way/2010/02/january_housing_starts_up_28_g.html

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leftofcool

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Wed Feb-17-10 10:44 AM
Response to Reply #19

21. The foreclosure sales are really picking up as well as

medium priced homes. The expensive homes are still sitting on the market but around here, homes under 200K are in short supply. We are seeing pending sales and under contracts on lots of the foreclosures here in the DC area. I think it is still slower in the hardest hit areas.

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AllentownJake

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Wed Feb-17-10 10:59 AM
Response to Reply #21

23. D.C. should not be having too many issues

That area was one of the few areas that faced the least amount of hits during the initial crisis.

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leftofcool

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Wed Feb-17-10 11:51 AM
Response to Reply #23

29. More than you would think but not as bad as say Nevada or

Florida. Most of the foreclosures around here were either the high priced homes or condos. But most of the condos have all been sold.

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Jennicut

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Wed Feb-17-10 11:13 AM
Response to Reply #21

26. Well, I wish they would build more $200,000 houses in CT. It would be nice.

Edited on Wed Feb-17-10 11:14 AM by Jennicut

The town I grew up in (Cheshire) is too expensive for me to live in. Raised ranches go for $350,000 or more. CT is funny like that. Wealthy towns and really poor cities and a few rural areas. I live in a tiny town that used to be more of a farming town but is growing a little bit.

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DCBob

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Wed Feb-17-10 12:12 PM
Response to Reply #26

31. The whole country needs more lower priced smaller homes..

Hopefully the McMansion trend has ended.

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Dappleganger

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Wed Feb-17-10 12:42 PM
Response to Original message

32. K&R for good news. nt

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