• Home ::
• Fundamental ::
• Economic Indicators ::
• US:Housing starts rise in October

• Send
• Print
• Add To
• Rss

US:Housing starts rise in October

Mon, Nov 9 2009, 17:51 GMT
by Economic and Strategy Team

National Bank of Canada

Annual rate
Latest : 157.3K (actual); 158.5K (forecast);
Previous 149.3K (revised from 150.1K)

FACTS: Canadian housing starts increased by 5.4% in October to 157.3K units from an downwardly revised 149.3K units in September. Urban starts rose 5.2% to 139.9K while starts in rural areas advanced by 6.8%. Single family units in urban areas fell to 67.3K from 69.2K while multi family units in urban areas surged to 72.6K from 63.8K. On a regional basis, Ontario showed the strongest performance adding 7.4K units to 57.6K while Quebec experienced the largest decline with starts down 4.1K to 37.2K on the month.

OPINION: Housing starts rebounded in October and rose to the highest level since December 2008. The advance was led by multiple dwelling starts which rose to an eleven month high. Despite a decrease in single family units in October, the 3-month trend for this segment of the market is clearly up. Market indicators point to additional expansion in residential investment
over the next few months. Residential building permits supports the view that increased activity is in the pipeline with permits increasing over the last two months.  Importantly single unit permits, a leading indicator for single unit starts continues to advance implying that the number of single housing starts will continue to improve going forward. Inventory levels of unabsorbed inventories are also providing positive feedback. Inventories in singles dwellings shrank again in
September, marking a sixth consecutive decrease.
 
These observations suggest that the housing market environment remains supportive that the housing sector will continue to expand in the fourth quarter. Initial data points to an increase in units of 29% (annualized rate) in Q4 over Q3. This bodes well for residential investments on a national accounts basis. All-in-all today’s report remains supportive of our view that the  canadian housing market and the economy as a whole are in recovery mode.

• Download full report with charts

Published on  Mon, Nov 9 2009, 17:53 GMT