A few months ago, pundits found green shoots growing in apartment building permit approvals amidst generally terrible overall residential housing data. In October 2010, apartment building permit data still has not gained traction, and overall building permit data remains anemic. The headlines from the U.S. Census Bureau:
Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 550,000. This is 0.5 percent (±3.0%) above the revised September rate of 547,000, but is 4.5 percent (±3.1%) below the October 2009 estimate of 576,000. Single-family authorizations in October were at a rate of 406,000; this is 1.0 percent (±1.3%) above the revised September figure of 402,000. Authorizations of units in buildings with five units or more were at a rate of 121,000 in October.
Privately-owned housing starts in October were at a seasonally adjusted annual rate of 519,000. This is 11.7 percent (±8.6%) below the revised September estimate of 588,000 and is 1.9 percent (±9.6%) below the October 2009 rate of 529,000. Single-family housing starts in October were at a rate of 436,000; this is 1.1 percent (±8.6%) below the revised September figure of 441,000. The October rate for units in buildings with five units or more was 74,000.
Privately-owned housing completions in October were at a seasonally adjusted annual rate of 613,000. This is 3.2 percent (±15.3%) below the revised September estimate of 633,000 and is 18.4 percent (±11.4%) below the October 2009 rate of 751,000. Single-family housing completions in October were at a rate of 501,000; this is 2.7 percent (±16.8%) above the revised September rate of 488,000. The October rate for units in buildings with five units or more was 107,000.
Econintersect uses the unadjusted data for evaluation. The US Census seasonal adjustment factors are dead wrong. Your eyes will see the proof in the unadjusted data graph for building permits below:
click to enlarge images
There is no way to defend improvement of any kind when the data remains in a YoY decline after starting the year with a YoY improvement. The only green substance growing in building permits is for apartments – and does not seem to be gaining any traction.
The residential construction market remains in decline. There continues to be more completions than building permits – and if this data is correct it means a continuing decline in residential construction spending.
Global Economic Intersection contributors have written articles that are optimistic about residential construction and pessimistic here and here and here. So far the data is supporting the pessimistic view.
- The Great Debate©: Residential Construction is Dead – Or Is It? by William Wheaton and Gleb Nechayev
- Unemployment and Foreclosures by John Lounsbury
- Demand for Housing Near an All time Low by John Lounsbury
- Where is the Bottom for Housing? We May Not Know for Years by John Lounsbury
Disclosure: No positions