Extra, extra… read all about it! New home construction for February surged up 22 percent, according to recent Housing Starts data , and it may be a good sign for home sellers in the near-term.
John Elwell, over at the Florida Real Estate Blog, has posted a link to the actual report, should you wish to review it.
I mean hey, the government issued report on housing starts says we’re up double digits – and the press sure is running with the story – calling it proof of a a market bottom.
But wait, dear Florida Mortgage Blogger reader - if we dig just a bit deeper into the data, we find that yes, once again, you can’t always believe what you read. (Oh the Humanity!)
The 22 percent figure reported deals with aggregate totals – meaning – it counts both homes and apartment building units. When we isolate single family homes from the 22 percent uptick, we see that February’s housing starts rose by just 1 percent. Oh, and the data’s margin of error is 11 percent.
Statistically, we really don’t know whether single family housing starts rose last month. They may have fallen. What we do know, however, is that the number of building permit requests rose.
Permits to build single-family homes were up 11 percent in February nationwide.
To home sellers, the rise in building permits may signal that a housing market turnaround is in fact underway. Builders wouldn’t be putting new inventory on the market if they weren’t fairly certain that they could sell it 9 months down the road.
I know… the headline figure of a 22 percent upswing in housing starts is sexy, but it’s not completely honest. Anyway, it’s not the number of housing starts that matters so much right now as the number of housing permits. A rise in permits signals that home builders — a group that’s lost a lot of money in the last 2 years — think the worst of housing is already over.
(Image courtesy: The Wall Street Journal Online)
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I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage loan originator, I’m your guy. Call me at 888-859-7418 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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The mortgage data prove that the situation is not at all good, but going worse. The real estate sector is under a great threat as the cost is growing by leaps and bounds, on the other hand people are not ready to have their own home. People are avoiding buying new homes. This time only the Government can boost some new blood into the sector.
Last blog post from Philip… 10 Mistakes to be Avoided while Refinancing Your Home – Part2
really wonderfully written and i appreciate it that you shared so useful and helpful with the readers of this blog.
You’re right in that it’s the number of housing permits that count. Keep up the great work.