Economy Watch: Housing Starts Bounce Back in September
- Oct 20, 2014
Privately owned U.S. housing starts in September were at an annualized rate of 1.017 million units, according to the Census Bureau on Friday. That’s 6.3 percent above the August figure of 957,000 units, which represented a considerable drop over previous months in 2014, and is 17.8 percent above the September 2013 rate of 863,000 units.
Both single family and multifamily starts rose, but—true to pattern—multifamily starts gyrated a lot more. Single-family housing starts in September were at an annualized rate of 646,000 units, which is 1.1 percent above the August figure of 639,000. The September rate for units in buildings with five units or more was 353,000, up 18.5 percent for the month. Year-over-year, single family and multifamily starts rose 11 percent and 30.3 percent, respectively.
Residential building permits came in at an annualized rate of 1.018 million units in September. That’s 1.5 percent higher than the August rate and 2.5 percent above the September 2013 rate. The gain in building permits was entirely because of multifamily, which was up 7 percent for the month; single-family permits edged down 0.5 percent in September compared with August.
Consumer sentiment strengthens
Could it be lower gas prices? Despite some unsettling economic news lately, and pestilence-related panic-mongering among news outlets lately, consumer sentiment was up 1.8 points to 86.4 for the mid-month October, according to the University of Michigan, which released its consumer sentiment survey for mid-month on Friday. That’s the highest the metric has been since July 2007.
The expectations component, up 3 points to 78.4, drove the overall gain; that’s the best reading for expectations since October 2012. Not quite as high compared with before the recession, but still reasonably strong, was the conditions component, which was unchanged at mid-month at 98.9.
The University of Michigan’s Consumer Survey Center bases its numbers on questioning 500 U.S. households each month on their own financial conditions and attitudes about the broader economy. Consumer sentiment is an indirect measure of economic strength, since consumers with better feelings about the direction of the economy are likely to spend more.
Fifteenth bank failure of 2014
The rate of U.S. bank failures has slowed to a trickle in 2014, with only 15 so far. The latest came over the weekend—the first since July—when the FDIC closed NBRS Financial of Rising Sun, Md. As of Q2 2014, NBRS Financial had about $188.2 million in total assets and $183.1 million in total deposits. Last year, a total of 24 banks failed; back in 2010, the most recent peak for U.S. bank failures, 157 banks went under.
Wall Street rebounded on Friday, with the Dow Jones Industrial Average up 263.17 points, or 1.63 percent. The S&P 500 advanced 1.29 percent and the Nasdaq gained 0.99 percent.