Good Construction Data Ignored - Winning!
The article "August Real Estate Forecast for Strength" projected the possibility that we could see improvement in the Starts data, the under construction data, and the completions data. The release of the report was muted by the coverage of President Trump's speech to the United Nation, the "Strong Sovereign Nations" speech.
Single Family Starts Soared through the 70,000 Level - Hits 76,100. The forecast column thought that this was a possibility. This is the strongest August Starts data since August of 2007. This was even stronger than 1990 - a feat that some would dismiss except when you realize that we were at levels lower than 1975 levels during 2010.
The Under Construction data almost record 1.1 Million units during August. This level of completions has not been seen since August 2007. This level of Under Construction data is higher than what we saw during August of 2001 and August 2002. The August to August change was slower this year than during prior Augusts, possibly indicating that, prior to the two Hurricanes, Harvey and Irma, that builders were concerned with overbuilding.
August Completions data exceeds 100,000 units - Better than August 2008. The elevated levels of completions mean that we could see strong August, September, October, and November new home sales data.
Rolling Year Data and Current Year Data Continue to Strengthen. There are other ways to examine the data. How many units have been started during the past 12 months, the rolling year or running year data, and how many have been started during the current year, since January, give snapshots of the housing market. The data for both the rolling year and current year data show improvement over 2016, which showed improvement over 2008-2015, and a similar historic sluggishness as the starts, under construction, and completion histograms reveal. Improvement is improvement. The forecast article indicated that some of the strength in new home construction and new home sales recorded during 2005 and 2006 could have been hurricane related. It will take time to see how much the new construction data is impacted by restoration work.
The Month to Month data showed more strength than expected. The month to month starts data did not drop as much as expected and the year to year data was at the high end of what was expected. The Under construction data grew at a slower pace month to month and August to August than were expected - they still grew. The completions data contracted July to August and expanded from August of last year. The net net is that the results were well within the expected range for the data, and the starts data was better than expected. The thirteen month data table reflects these changes.
Mixed Revisions to July Advance data and June Preliminary data. The final table reveals that, generally speaking, the new construction data from June was revised lower and the data from July was revised higher.
The New Construction data was the best seen since August of 2008, across the board. Normally the national headlines would be "Best August Data since August 2008." I guess the rest of the people who report on this data are tired of winning.
It's the economy.
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