Recapping Another Strong Week of Housing Data

December 19, 2019 | Hoya Capital

Recapping Another Strong Week of Housing Data Uncategorized Dec 19 Written By Housing data showed signs of continued reacceleration this week as Homebuilder Sentiment, Housing Starts, Building Permits all exceeded consensus expectations while Existing Home Sales continued it's reacceleration as well. The combination of lower mortgage rates and pent-up demographic-driven demand has spurred a recovery in new home construction this year following the "mini-housing recession" experienced in 2018. On Monday, the NAHB reported that homebuilders are as confident as ever.

With a reading of 76, the Housing Market Index climbed to the highest level in 20 years. Among the three subcomponents, Current Sales rose eight points to 84, Futures Sales increased one point to 79, and Buyer Traffic hit all-time record highs at 58, up 4 points. Among the regional indexes, the Midwest saw a jump to the highest level on record while the West and South regions continue to record the strong gains.

The Northeast, however, continues to lag. In December, the West region declined three points to 67, the South lost 1 point to 66, the Midwest gained 5 points to 64, while the Northeast lost 1 point to 45. On Tuesday, US Census Bureau reported better-than-expected Housing Starts and Building Permits data. The US Census Bureau reported that housing starts rose to a pace of 1.365 million in November, higher than consensus estimates of 1.345 million.

Building permits rose to a rate of 1.485 million, higher than estimates of 1.418 million. The gains were broad-based with single-family rising for the sixth consecutive month and multifamily showing continued signs of reacceleration as well. Seemingly an impossible feat just five months ago, 2019 may actually record positive growth in housing starts when all is said and done. The strong end of 2019 for home construction comes after one of the worst eight-to-twelve months for home construction since the financial crisis.

The 13.6% year-over-year jump in total starts in November ...