Economy Watch: Housing Starts Spike in September
- Oct 18, 2012
The Census Bureau reported on Wednesday that housing starts jumped in September to an annualized rate of 872,000 units. That’s 15 percent more than the revised August estimate of 758,000, and a whopping 34.8 percent above the September 2011 rate.
Single-family starts were a major component of the increase, coming in at an annualized rate of 603,000 units during September, which is 11 percent above August and fully 27.3 percent more than the same month last year. Apartment starts (five units or more) were up 22.8 percent month-over-month and nearly doubled year-over-year, up 93.4 percent, though they tend to be jumpy.
Residential building permits, a forward-looking indicator, were up in September at an annualized rate of 894,000 units, which is 11.6 percent above the August rate. Compared with September 2011, the rate of permitting increased 45.1 percent. Single-family permitting showed an increase of 6.7 percent for the month.
California foreclosures back to ’07 levels
Among states hard-hit by the housing crash, none took it harder than California—or at least none in its weight class, since the state’s GDP is big enough to be its own country, being only slightly smaller than Italy or the UK in that regard. So it’s worth noting that three-and-a-half years after peaking, the number of California homes entering foreclosure fell last quarter to the lowest level since the early stages of the housing bust (1Q07), according to DataQuick on Wednesday.
A total of 49,026 Notices of Default were recorded on California residential properties during the third quarter, down 10.2 percent from the second quarter, and down 31.2 percent from 3Q11. Unsurprisingly, Notices of Default peaked in the first quarter of 2009 at 135,431. The decline is due in large part to a stronger economy and housing market, but also more short sales, DataQuick explained.
Short sales—transactions in which the sale price falls short of what was owed on the property—made up an estimated 26 percent of statewide resale activity last quarter, up from an estimated 24 percent during the second quarter. The estimated number of short sales during 2Q12 was 19 percent higher than during the second quarter of 2011.
Chinese growth slows again
The Chinese government reported on Wednesday that the country’s economy grew 7.4 percent in the third quarter of 2012, compared with the same quarter of 2011, which represents a continuing slowdown in growth for the East Asian giant. But toward the end of the quarter, however, retail sales, industrial production and investment all saw an uptick, leading investors to speculate that the Chinese economy, soft now for seven quarters, has turned a corner.
Wall Street had another small up day on Wednesday, a little peppy because of the housing numbers and maybe the Chinese numbers. The Dow Jones Industrial Average gained 5.22 points, or 0.04 percent, while the S&P 500 and the Nasdaq were up 0.41 percent and 0.1 percent, respectively.