INDICATOR: November Housing Starts and Permits
KEY DATA: Starts: up 22.7%; Permits: down 3.1%
IN A NUTSHELL: "As long as the cold and snow doesn't slow down builders too much, the robust housing activity will continue since starts are lagging permits."
WHAT IT MEANS: The government shut down caused the housing data to be delayed and we got the numbers for September through November. Boy, were they great. Yes, housing starts soared in November but the pace was largely baked in the cake since permit requests were running well above the construction pace for the previous two months. Permit requests during September and October were 125,000 units annualized per month above the starts pace. Since builders are not wasting money on speculative permits, the lack of activity was going to lead to a jump in building. It looks like builders took a wait and see approach to the October government debacle and once they got the all clear sign, they started using all those unused permits. Home construction for both single-family and multi-family units is growing rapidly and the gains are across the country. There was some weakness in the Northeast in November, but that came after the region led the way in September and October. So far this year, housing starts are over nineteen percent above the total for the first seven months of 2012. There was, not surprisingly, a jump in the number of homes currently being built. It is likely, barring a weather-induced December slowdown, that the total number of starts could be the highest total since 2007.