“I’m hiding from the storm till the damage is done.” (Lauren Alaina) Storms damaged data on housing starts and building permits from August to September, while existing home sales edged higher.
Hurricanes Harvey and Irma put a dent in new home construction in Florida and southern Texas. The Commerce Department reported that total September housing starts fell 4.7 percent from August to an annual rate of 1.127 million units versus the 1.160 million expected. It was the lowest level since September 2016; however, from September 2016 to September 2017, starts were up 6.1 percent. Single-family starts fell 4.6 percent from August, although they were up 5.9 percent from September 2016. Multi-dwelling starts with five or more units saw a drop of 6.2 percent from August and a 7.9 percent rise over September 2016. Overall, the South saw a 9.3 percent decline in September, while gains were seen in the Northeast, Midwest and West.
Building permits, a sign of future construction, fell 4.5 percent from August to an annual rate of 1.215 million units, just below the 1.225 million expected.
After three straight monthly declines, existing home sales eked out a 0.7 percent gain in September to an annual rate of 5.39 million units, above the 5.29 million expected. September’s sales pace is 1.5 percent below a year ago and is the second slowest over the past year (behind August). Ongoing supply shortages and the hurricanes muted overall activity and caused sales to fall back on an annual basis, according to the National Association of REALTORS®.
On a positive note, the October National Association of Home Builders Housing Market Index rose four points to 68, as homebuilders rebounded from the initial shock of Hurricanes Harvey and Irma. The Index measures sentiment among builders, and any reading over 50 is considered a positive sign.
Finally, despite recent rallies in U.S. stock markets that negatively impacted mortgage bond prices and the home loan rates tied to them, home loan rates remain near historic lows.
Find out if the economy is still flexing its muscles with the first reading of third-quarter GDP.
- Economic data kicks-off on Wednesday with the release of Durable Goods Orders.
- Housing data comes from New Home Sales on Wednesday, followed by Pending Home Sales on Thursday.
- Also on Thursday, weekly Initial Jobless Claims will be reported.
- Gross Domestic Product (GDP) will be delivered on Friday, in addition to the Consumer Sentiment Index.
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