The housing market pundits
who love looking at what we don't have, had a field day with last week's data.
What we didn't have was growth in starts and permits in July. Housing Starts
dipped 4.8% last month, to a 1.155 million annual rate, while Building Permits
slipped 4.1%, to a 1.223 million yearly rate. Before we get caught up in talk
about the end of the housing recovery, let's note that most all the drop was in
multi-unit starts, which, because of the size of those projects, are very
volatile, month to month. Single-family starts were off just 0.5% in July
but their trend continues to rise, up 10.9% year-over-year.
Yes, multi-family starts are off 33.7% from a year ago, but that just
reflects a shift in the mix. In 2015, 35.7% of starts were multi-family. Last
month, multi-family made up just 25.9% of all starts. This is good for the
economy, since each single-family home contributes about twice what a
multi-family unit does to GDP. Finally, the EVP of an online real estate
company explained why today's home prices are not near bubble-era: "while
prices nominally have surpassed the 2006 peak, we're not talking about 2006 dollars.
We've had 9 years of inflation... home prices today have basically recovered to
about where they were in 2004." How about that.
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