February '07 Housing Starts:UP - Building Permits: DOWN
The Commerce Department and HUD jointly reported today that Housing Starts for February '07 were up 9% over the previous month (January '07) which is still sat a 28% lower rate than one year ago (February '06). Click Here to read the Government's Complete Report.
Additionally the government reported that "new building permits issued" were lower by 2.5% from the previous month (January '07) and likewise 28% lower than one year ago (February '06).
While this is not great news for the homebuilder industry, it is great news for the overall housing market as it further reduces the inventory glut of unsold newly constructed homes and brings us ever closer to equalibrium of supply and demand.
Additionally, MarketWatch reports:
The data are not likely to have much impact on the deliberations at the Federal Reserve later Tuesday and Wednesday. The Federal Open Market Committee is expected to keep its overnight interest rate target steady at 5.25%. The last time, the committee noted some "tentative" signs of stabilization in the troubled housing market, but since then, bad subprime mortgages have surfaced, upsetting investor sentiment.
Completions of new homes fell 9.4% to a seasonally adjusted annual rate of 1.66 million, an indication that builders are ramping down their inventories. It's the lowest number of completions since August 2003. It takes about 6 months for a home to go from groundbreaking to completion.