Home building statistics - really bad news
Monday, January 28th, 2008The US Commerce Department reported various housing data this morning that confirms the poor state of affairs in the US housing market. Specifically:
- Building permits for single-family homes in December were 10.1 percent (±1.6%) below the November figure and 25.3 percent (±0.8%) below the December 2006 figure.
- Single-family housing starts in December were 2.9 percent (±8.7)* below November and 24.8 percent (±1.3%) below the December 2006 level.
- According the AP, it will take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the month’s supply stood at 10.3 months in October 1981.
You can see the data and release at this Commerce website.
What’s really interesting is that the markets are shrugging this off. Take a look at this mornings prices of home builders, complements of Google Finance:
Ths homebuilders have been rallying since the market low reached the day the Fed lowered interest rates 75 basis points on an emergency cut with another 50 basis points expected TOMORROW.
Having said all this, markets ALWAYS move further and harder than expected. More problems seem likely without some extreme structural (read fiscal) or economic stimulus. The Fed seems to be doing its part. Will the Government in the midst of an election year?