Housing start have rebounded to the highest level since the collapse of the housing bubble:
WASHINGTON — New residential construction starts surged 15 percent in September to their highest annual rate in more than four years, as the housing sector continued to show signs of a burgeoning rebound.
The number of new privately owned housing units that began construction was up for the third straight month, and rose in September to a seasonally adjusted annual rate of 872,000, the Commerce Department said Wednesday.
The figures surpassed economists’ expectations of about a 770,000 annual rate.
September had the best monthly performance since July 2008, when housing starts were on an annual pace of 923,000. Compared with last September, new housing starts are up 34.8 percent, the Commerce Department said.
Last month’s growth was “surprisingly strong,” said David Crowe, chief economist at the National Association of Home Builders.
However, the unemployment rate then was 5.7%. The reason for our economic doldrums clearly is not housing, at least not in any straightforward way. Look for another explanation.
We had 2 million more people employed in construction in 2008. If we had those levels (we currently have 12 million unemployed), we would be looking at about 6.3% UE. If we had closer to historical averages, we would be at about 6.8%. If we had the kind of multiple we were told we would get from the pipeline, we would have negative UE. I think Case-Shiller is too high for this to sustain, along with remaining inventory levels.
Steve
There’s a Yiddish proverb I think is appropriate here: Az di bobe volt gehat beytsim volt zi geven mayn zeyde. If my grandmother had balls, she’d be my grandfather.
That housing has apparently rebounded so quickly is what I find chilling. That it has occurred simultaneously with credit expansion suggests bad things in the future, at least to me.
Ben, if it’s anything like what I’ve seen around town, it’s mostly on the high end. I saw one neighborhood the other day were about every other house was being razed so a McMansion could be built in its place. It reminded me of 2005. OTOH, I’m not seeing a lot of starter houses getting built, or mid-range houses. I believe this all speaks to the bifurcating economy.
I believe there was a recent article in the WaPO about the return of house-flipping, which has been picked up across the country in newspapers that puport to say its returned there as well. My impression from the one article is that they might be buying lower than before the housing crash, but don’t if these are just anecdotal stories being told.
OT: Icepick: Chuck Todd reported that Orlando is one of the top ten media markets this week for one or both of the campaigns. A quick glance suggested it was the only one south of the mason-dixon line.
I wonder if this is a regional spike? Not all areas were heavily over built.
Steve
PD, I’ve been trying to scrounge up the time to write up my most recent trips and all the yard signs I counted. I hit Obama-centric areas yesterday as well as part of my usual College Park route. Doing it two days in a row revealed shenanigans. Not only are signs being stolen, signs are being switched! On house had been steadfast in their support of Romney. Suddenly they’re an Obama household! The next day back to Romney.
In CP I saw an explosion of Obama signs on Princeton this week. Some of that is legit. Some of it isn’t. I saw three abandoned houses with Obama signs. Doh! It wasn’t until I drove by the last one that I realized what I had seen. I doubled back to check, and sure enough. At least one other Romney house has had their sign stolen.
Nevertheless, the CP Obama crowd has definitely picked up their intensity, though Romney holds a small lead if you look at the back streets. I would expect that to be a swing neighborhood but I’m not sure.
I hit some definite Obama-centric neighborhoods, too. It didn’t occur to me until several hours the biggest part of the story. While those neighborhoods are running heavily in favor of O over R, the overall intensity was much less than the comparable sized area I had covered the day before. Romney areas appear to be more enthused than Obama areas. I’ll need to get out my notes, though, and go through them a little better to see if I believe my impressions. But wrestling with my two year-old all day doesn’t give me time to write or think anything more than a quick comment.
Short version: Areas near downtown Orlando favor Obama, black areas favor Obama, College Park is a split decision, Winter Park, Winter Garden and Maitland are all MASSIVELY Romney. Romney is certainly generating more enthusiasm than McCain, and that will be problematic for Obama.
The funniest thing I saw was a house with two Romney signs and one Obama sign in the front yard. I was so surprised I turned around to check. I’m guessing that dinner time in that household is pretty tense these days!
That was in Winter Park, and I only count that as one for Romney and one for Obama. Perhaps, though, there are three voters in that house and it’s 2-1 Romney, but I wasn’t going to stop and ask!
One final note (I should probably just go write the posts now but I’m tired), yesterday I FINALLY saw three businesses that had signs up for Obama. The business community here has been overwhelmingly pro-Romney. Even a civil engineering firm over near Orlando Executive Airport had all kinds of Romney signs up.
But yesterday I saw a business on Colonial Drive that had an Obama sign up, and two of the small shops here in Pine Hills had Obama signs up. Obama’s people are finally getting their act together down here.