Housing Starts Down a Good Thing - Analyst Blog
In this feature, we discuss Lennar (
LEN),
D.R. Horton (
DHI),
Standard Pacific (SPF), Ryland (
RYL),
Beazer (BZH),
Home Depot (
HD),
Lowes (
LOW) and?
Bed Bath & Beyond (BBBY).
This morning, the data on September housing starts and permits came out.? Both were down sharply.? I consider this to be very good news, even though it contributes to the near-term weakness in the economy.?
There is still a massive oversupply of housing, and the only realistic way of getting the inventories down is to stop building more new houses.? Remember the first rule of holes: when you find yourself in one, stop digging.? In this case, new foundations. ?Turning first to building permits, a solid indicator of future housing activity (all data is seasonally adjustable annual rates):?
?? ?
- Total building permits 786,000, down 8.3% from August, down 38.4% from a year ago?? ?
- Total U.S. single family permits 532,000, down 3.8% from August, down 38.9% from a year ago?? ?
- Northeast the strongest, up 13.4% on the month but down 32.6% year over year?? ?
- West was weakest down 12.7% on the month, down 44.6% year over year?? ?
- South down 9.9% for the month, 37.3% year over year?? ?
- Midwest down 9.8% for the month 37.1% year over year
Turning to Starts:
?? ?
- Total U.S. housing starts 817,000, down 6.3% for the month, 31.1% year over year.? Lowest rate since 1991?? ?
- Total U.S.
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