Apr. 19 2011 - 11:43 am
The Commerce Department reported a jump in housing starts last month, with construction of new homes and apartments at a seasonally adjusted annual rate of 549,000 from a revised 512,000 in February, a 7.2% month to month gain. Analysts were expecting around a lower 520,000 rate in March, according to analysts polled by Bloomberg. Building permits also climbed 11.2% to an annual rate of 594,000, well over the analyst projection for a 3% rise in permits for construction on future homes.
Some economists still see a sharp rift in new home construction and the ailing real estate market in the U.S. Housing starts in single-family homes, which increased by 7.7%, are still not showing a pace that would reflect anything close to a recovery in housing, argues Paul Dales, a senior economist at Capital Economics. A month of heavy snowfall prior to March may have pushed some of the building ahead, and the increase still leaves new-home construction 14% below its level a year ago, and 76% below its peak in 2006. Dales writes:
“The rebound in housing starts in March does little to hide the fact that homebuilding activity remains close to rock bottom. With both the demand and need for new homes still very low, housing starts aren’t going to enjoy a more meaningful recovery for a few years yet.”
The real estate market continues to be depressed as a result of the foreclosure crisis that hit areas like California, Florida, Nevada and Illinois hard two years ago. This is a factor in the low demand for new homes, as existing homes have plunged in sale value and caused the more expensive new home sales to fall to 250,000 in February.
“At some point a rise in household formation and a rebound in the appeal of owning a new home will trigger a recovery in homebuilding. But that point is a few years away yet,” Dales said.
Home-builder stocks nonetheless saw gains after the housing starts data Tuesday. KB Home was up 1.3%, Lennar increased 1%, PulteGroup increased 3% and D.R. Horton was up just under 1%.
Some economists still see a sharp rift in new home construction and the ailing real estate market in the U.S. Housing starts in single-family homes, which increased by 7.7%, are still not showing a pace that would reflect anything close to a recovery in housing, argues Paul Dales, a senior economist at Capital Economics. A month of heavy snowfall prior to March may have pushed some of the building ahead, and the increase still leaves new-home construction 14% below its level a year ago, and 76% below its peak in 2006. Dales writes:
“The rebound in housing starts in March does little to hide the fact that homebuilding activity remains close to rock bottom. With both the demand and need for new homes still very low, housing starts aren’t going to enjoy a more meaningful recovery for a few years yet.”
The real estate market continues to be depressed as a result of the foreclosure crisis that hit areas like California, Florida, Nevada and Illinois hard two years ago. This is a factor in the low demand for new homes, as existing homes have plunged in sale value and caused the more expensive new home sales to fall to 250,000 in February.
“At some point a rise in household formation and a rebound in the appeal of owning a new home will trigger a recovery in homebuilding. But that point is a few years away yet,” Dales said.
Home-builder stocks nonetheless saw gains after the housing starts data Tuesday. KB Home was up 1.3%, Lennar increased 1%, PulteGroup increased 3% and D.R. Horton was up just under 1%.
No comments:
Post a Comment