For instance yesterday it was reported by Reuters " U.S. housing starts surged to a 1-1/2 year high in November and permits for future construction were the highest since March 2010 as demand for rental apartments rose, offering hope for the weak housing market."
As a result of this good news the stock market had reason to go higher which was helped by more good news that Germany business confidence levels rose and the auction of Spanish debt went well causing rates to drop. Most of which this good news was noise, meaning only temporary because confidence can change at any moment based on, you guessed it "more news" and debt auctions move with sentiment and confidence but still its was a nice change from what we have come to expect which is "not so good news"
The only real substantial news out of it all was that our housing permits rose, that is real, hard to dispute, it requires somebody somewhere to have confidence enough to put up real hard cash and to commit to even more debt obligations, so it would seem these housing rumblings are for real.
Anyway back to the housing stats.
From Reuters"The Commerce Department said on Tuesday housing starts jumped 9.3 percent to a seasonally adjusted annual rate of 685,000 units, the highest since April last year."
" Economists polled by Reuters had forecast housing starts rising to a 635,000-unit rate. Compared to November last year, residential construction was up 24.3 percent."
A good gauge to better see into the future is tracking building permits which rose 5.7%, this was due to an increase in permits to build apartments/multi family housing. It seems that the the fallout from the severe decline in home prices coupled with the difficulty in securing home mortgages as well as owners who have lost there homes has pushed more people into renting instead of buying or buying a smaller multi family type home.
No matter, any increase in housing construction is a very good thing for the economy because each home built creates an estimated three additional (3) jobs and better yet results in about 90,000 in additional taxes generated. We still have a long way to go but it looks like we are finally on our way.
Housing is starting to gain some credible traction, builders confidence is at the highest its been in almost 2 years, we have two quarters of positive housing growth, so it appears that housing is becoming less of a drag on the economy and if this is to be taken as an indication of the future, maybe we have really started to turn the corner in our housing markets.
All in all the news was very positive, a few more months are needed to confirm this trend is real and then watch things start to take off. Keep your fingers crossed that this positive housing trend is for real, because rebuilding the housing market is whats needed to rebuild our economy, its a major contributor to our GDP.
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