Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  Housing starts declined 1.1% in February to 698,000 units at an annual rate
Posted Under: Data Watch • Home Starts • Housing
Supporting Image for Blog Post

Implications: The recovery in home building is well underway.  Housing starts essentially matched consensus expectations in February, but are up almost 34.7% from a year ago.  The number of homes under construction increased for the sixth straight month, the first time this has happened since 2004-05.  The most impressive part of today's report was that permits to build homes easily beat consensus expectations and are up 34.3% from a year ago.  That's the largest percentage increase in any twelve-month period in the last 20 years and signals large gains in home building in the coming year.  Some of the recent gains in building have been weather-related.  This winter has been unusually mild in much of the country.  As a result, we would not be surprised if the report next month shows builders, on a seasonally-adjusted basis, pulling back a little in March.  Regardless, it looks like the first quarter of 2012 will be the fourth straight quarter where home building boosts real GDP.  As the charts to the right show, multi-family activity – both starts and permits – has been leading the way and we expect that to continue, particularly now that a legal settlement means more foreclosures can move forward.  Some people occupying homes they have not been paying for will now have to go elsewhere and rent.  Based on population growth and "scrappage," housing starts should eventually rise to about 1.5 million units per year (probably by 2016), which means the recovery in home building is still very young.  For more on the housing market, please see our research report (link).  In other recent housing news, the National Association of Home Builders housing market index remained steady at 28 in March, up from 17 a year ago and as low as 14 as recently.

Click here for a printable version
Posted on Tuesday, March 20, 2012 @ 10:27 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.