Residential Round-Up

As the October housing numbers trickle in, residen...

As the October housing numbers trickle in, residential building and construction industry reports from areas around the country can provide a snapshot of what the various regions are experiencing as the housing slump drags on. And on. And … say it with me … on.

Some recent state results include:

  • Utah — New home demand along Utah’s Wasatch Front hit its lowest level in 17 years last month, according to a new Construction Monitor report. Builders took out just 530 single-family home permits, down from 1,186 in October
    2006, the Salt Lake Tribune reports.
  • Pennsylvania — Pittsburgh’s October residential building permits revealed an increase over the same period in 2006, but the total permit number for the first 10 months of the year is still lower than last year, according to the Pittsburgh Business Times. Housing permits in the Pittsburgh Metropolitan area were 12.8 percent higher than last year — however, the total permits issued this year thus far are down 6.4 percent from 2006.
  • South Carolina — The October unemployment rate rose slightly from
    September to 5.8 percent but construction payrolls expanded by 500 jobs from September to October, according to the Post and Courier. The construction payroll is still, however, off by 300 positions compared to October of last year. A senior Wachovia Corp. economist said building industry employment will probably drop in the coming months.

Overall, a mixed bag: But then again, we’re just talking about three states. Given yesterday’s Commerce Department report, which indicated a dip in building permits, and the surprise Freddie Mac announcement that the government-sponsored mortgage agency had lost $2 billion in the third quarter, people certainly aren’t feeling 100 percent better today about the housing industry.

They may, in fact, be feeling a lot of things, most notably, confusion. There hasn’t been a clear indication we’re out of the woods yet, but the sprinkling of good news items of late — such as the Wall Street Journal reporting that
McGraw-Hill Construction expects residential construction
spending to see less declines than it did this year and total
construction spending to drop just 2 percent in 2008 — have given hope to some.

And yet, there’s one group some analysts are saying might be a little less hopeful: The Fed. The Fed’s comments from its last Oct. 31 meeting (which can be downloaded in PDF form here) were published yesterday, revealing concerns about increased unemployment and reduced growth in 2008 that were interpreted to mean we may be seeing another rate cut in December. It was influential enough, anyway, to drive Wall Street was up yesterday after the notes’ release.

Should we be pleased the Fed is acknowledging how serious the housing situation is after expressing more concern for most of the year about inflation? Or should we be nervous that the Fed appears to feel that we’re in for a long, rough ride? Post your thoughts below.