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The blue line is for single family starts and the red line is for single family completions.
Starts are moving up, but the increase in completions has just started
The housing sector of the economy, which has been a major drag on the recovery from the Great Recession, put the optimists in an even better mood Wednesday when the Census Bureau released its figures on new residential construction. These were way better than expected:
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 872,000. This is 15.0 percent above the revised August estimate of 758,000 and is 34.8 percent above the September 2011 rate of 647,000.

Single-family housing starts in September were at a rate of 603,000; this is 11.0 percent above the revised August figure of 543,000. [...]

Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 894,000. This is 11.6 percent above the revised August rate of 801,000 and is 45.1 percent above the September 2011 estimate of 616,000.

Single-family authorizations in September were at a rate of 545,000; this is 6.7 percent above the revised August figure of 511,000.

Bill McBride, who runs the blog Calculated Risk, which covers the ups and downs of the housing market intensively and has a record for almost always getting the analysis right, says:
And the growth in housing starts should continue. My estimate is the US will probably add around 12 million households this decade, and assuming no excess supply, total housing starts would be 1.2 million per year, plus demolitions and 2nd home purchases. So housing starts could come close to doubling the 2012 level over the next several years - and that is one of the key reasons I think the US economy will continue to grow.

As can be seen from the chart that leads off this post, however, getting back anywhere near the normal, non-bubble residential level of construction will require a lot more climbing out of a deep, deep hole.

Nonetheless, while news about housing is still grim in many regions of the country, and millions of families are hurting because of it, other housing activity is improving along with construction starts and completions. For instance, foreclosure activity, which has dogged the housing market for four years, is down to its July 2007 level. Moreover, housing prices seem to have reached bottom in many markets.

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Comment Preferences

  •  a relative of mine just sold her house in socal (8+ / 0-)

    in one day. i know that's anecdotal, but this report didn't surprise me at all because of it.

    this is going to be good news for those states that got hit so hard in the bust. with any luck, prop 30 will pass and by next year we'll be looking at much smaller budget shortfalls and a 2/3 dem majority in the CA state leg, and we can get out of this ^$%#! austerity cycle.

  •  As Steven Benen wrote in a post he had up earlier (9+ / 0-)

    discussing this:

    This probably isn't what Republicans wanted to hear.
    This is probably entirely accurate, as sad as that might be.

    Cautiously optimistic.

    Conservatives seem to believe that the rich will work harder if we give them more, and the poor will work harder if we give them less. E.J. Dionne

    by blueyescryinintherain on Wed Oct 17, 2012 at 12:39:53 PM PDT

  •  And it would be good to know (5+ / 0-)

    when housing prices are likely to recover so those of us who are currently under water might be able to rebuild our devastated equity. I did not buy at the top of the bubble but the market in my area completely collapsed and wiped out $100,000 of equity. Thanks so much, banksters, for making my old age more precarious.

  •  An extremely important diary, MB. (6+ / 0-)

    This is just one of positive economic news that gets lost in the horse race.

    This scares me because if Obama should lose, Romney gets credit for all of the President's toil and trouble.

    I live in FL where the housing market was" severely" decimated.  Our housing prices are increasing and the number of foreclosures appear to be bottoming out.

  •  Perfect timing! (6+ / 0-)

    The economy is clearly on the rebound.  Housing means a lot to the middle class.  It is probably the largets invetment a middle class family makes.

    Between this and unemployment going down, the Repugs have less and less bullets.  Romeny's CNN undecided graphs lines did not do well when the economy was the subject during the debate.

    The one graph I like to bring show when talking to people in business is this one;

    DOW under Obama

    The Dow Jones Index is a function of the economy as a whole and it has risen over 100% since Obama took over.

    Housing, employment, Wall Street, all better since Obama has been in the WH.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Wed Oct 17, 2012 at 12:45:22 PM PDT

  •  The Census Bureau has joined the conspiracy (10+ / 0-)

    First it was the Bureau of Labor Statistics employing Chicago-style politics in a hideous conspiracy to boost Obama's socialist agenda.

    Now the Census Bureau is weighing in with its binders full of skewed numbers.

    The next thing you know ESPN will try to make us believe the Yankees are down 3-0 to the Tigers.

  •  Optimism about housing is relative to... (1+ / 0-)
    Recommended by:
    cynndara much our government subsidizes Wall Street, unless and until Washington decides to bypass the middlemen in the equation. There's a good piece in today's NYT's "Room for Debate" column on this, [ LINKED RIGHT HERE].

    As it stands now, above and beyond the unknown shadow inventory, which is substantially more than publicized, banks continue to do their hit-and-run in this market as the Times also notes (see link, above) today...

    At a time when low rates have led to a boom in new and refinanced mortgages, recent moves by the Federal Reserve have allowed banks to make even more profit off mortgage-backed bonds than they did previously. And those rates could be a half-point lower if banks were satisfied with the profit margins of just a few years ago...
    Then there's Dean Baker, pondering aloud, in the same article, wondering what lies ahead, LINKED RIGHT HERE.

    So, despite all the talk, Taegan Goddard provides us with a pair of much more starkly contrasting graphics (covering much of what you spin, above, MB) regarding short-term and long-term housing start realities, LINKED RIGHT HERE.

    A housing recovery? Seriously? Who's going to buy homes?

    The (roughly) one-quarter to one-third of the population that still qualifies for a mortgage?

    The kids saddled with record-breaking amounts of student loans?

    The 23-24+ million folks that are unemployed or underemployed?

    The folks that we're being told are "deleveraging," when in fact they're merely being foreclosed and charged-off by Wall Street?  

    Or, are massive amounts of these properties being bought by investors, as statistics now show? Making home-buying--i.e.: the pursuit of the "American Dream"--an out-of-reach option for many that grew up thinking otherwise (until just 4 or 5 years ago)?

    It's the new normal. There's a new natural state of employment/unemployment. And, I would go as far as to say the same is true of realities on Main Street when it comes to the pursuit of home ownership, too.

    This is the destruction of the middle class, writ large. Some people spin that as a housing recovery.

    I think it's the former...spin sans real recovery.

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Wed Oct 17, 2012 at 01:32:14 PM PDT

  •  While that might be good economically, in this (1+ / 0-)
    Recommended by:

    environment we're seeing planning commissions and boards of supervisors approving projects that are HIGHLY questionable in terms of consistency with local and state planning laws and, well, common sense.

    That isn't an improvement, environmentally.

    AND, BTW, there is a major move in CA to stick a fork in CEQA our major environmental procedural law(s). THAT is definitely not good.

    202-224-3121 to Congress in D.C. USE it! You can tell how big a person is by what it takes to discourage them. "We're not perfect, but they're nuts."--Barney Frank 01/02/2012

    by cany on Wed Oct 17, 2012 at 01:41:00 PM PDT

  •  New construction in SW CT up. (1+ / 0-)
    Recommended by:

    Entry level new construction in Riverside, Old Greenwich, Darien, New Canaan and Westport are picking up.  In particular Westport where demolition permits are at 5 year high and tax assessors can't keep up with permits.   Specifically the new construction priced below $3,000,000 (not a typo and yes that's entry level) is moving.  But there is a lot of new construction going up where the land alone sold for $2,000,000 to $4,000,000.

    These are all Wall Street and finance guys.  The more blue collar areas otoh are not seeing an increase in housing starts.  

    This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

    by DisNoir36 on Wed Oct 17, 2012 at 02:21:42 PM PDT

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