Housing Starts Boom in September, Signaling Industry Healing

Andrew Klips |

Housing Starts Boom in September, Signaling Industry HealingGiving the latest signal that the U.S. housing market is continuing to recover, the Commerce Department said this morning that construction on new homes leapt upward by 15 percent in September from August to an annual rate of 872,000, marking the highest level since July 2008. Building permits, a barometer for future construction, rose by 11.6 percent to an annual rate of 894,000, also the highest level since July 2008.

The steep climb in housing starts cruised past predictions, including the 777,000 median estimate of 81 economists surveyed by Bloomberg. The building permits figure also easily beat even the highest estimates, with economists calling for a median rate of 810,000. Construction of single-family houses, which accounts for about 75 percent of the housing market, climbed 11 percent in September from August to a 603,000 rate. Work on multi-dwelling homes, such apartment buildings, is generally more volatile, but increased 25.1 percent to an annual rate of 269,000.

Housing starts in August were revised upward to 758,000 from an original reading of 750,000. Building permits for August were revised down modestly to an 801,000 annual rate.

Over the past 12 months, construction started on 34.8 percent more homes, representing the largest year-over-year climb since April. The number of building permits for September outstripped the figure of September 2011 by a whopping 45.1 percent. That was the biggest year-over-year climb in nearly three decades.

Although the numbers are stellar compared to 2011, housing starts are still well below peaks in 2005 of 2.1 million annual starts. Taking a “glass is half full” mentality, starts are now handily above 2009 lows of 554,000. Near record low interest rates and a dwindling inventory of pre-owned and foreclosed housing is flaming demand for new buildings.

Yesterday, the National Association of Home Builders/Wells Fargo housing index – a gauge of builder’s confidence – edged upward by 1 point to 41, its highest level since June 2006 and sixth consecutive monthly gain. Although at its highest point in more than six years, readings below 50 indicate that, of the respondents, more regarding current conditions as poor than those that responded optimistically.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
DVAX Dynavax Technologies Corporation 10.15 0.10 1.00 879,923


Emerging Growth

Naked Brand Group Inc

Naked Brand Group Inc through its wholly-owned subsidiary is engaged in manufacturing and selling of direct and wholesale men's undergarments to consumers and retailers.

Private Markets


Snapchat is the fastest way to share a moment with friends. The mobile app, allows users to not only share photos with friends but also control how long they can…

Dropbox, Inc.

Dropbox is a service that allows their users to bring all photos, docs, and videos anywhere, and share them easily. Any file saved to Dropbox will automatically save to all…