Date: September 21, 2010
United States New Residential Construction, August 2010 Results
Source: Joint Release from the United States Census Bureau and the United States Department of Housing and Urban Development
Link to Release: http://www.census.gov/const/newresconst.pdf
Summary: U.S. Housing starts rose 10.5 per cent to a seasonally adjusted annual rate of 598,000 units in August from the downwardly revised rate of 541,000 recorded in July. The August result was the highest rate of starts since April. While the annual rate of single-family starts rose four per cent, most of the August increase came in the more volatile multi-unit category, which experienced a 43 per cent increase. Building permits, which signal future building activity, rose 1.8 per cent.
Analysis: US housing starts remain above the lows reached during the first half of 2009, but remain far below pre-recession levels. In fact, the annual rate of starts in August remained near the lowest levels reported over the past 50 years. The resale home market in the US remains very well supplied with a low level of sales relative to listings. In addition, one-third of resale transactions are distressed in nature (i.e. in foreclosure or in danger of foreclosure), which often translates into discounted selling prices relative to comparable non-distressed properties. The very well-supplied resale market coupled with the availability of distressed properties has meant that very few buyers have been spilling over into pre-construction sales centres. The residential construction sector has suffered as a result. From the perspective of the Canadian economy, the lack of recovery in US home construction is problematic for the export of Canadian-made building materials. The production of these building materials has generally been associated with well paying jobs including those in manufacturing.
Source: Toronto Real Estate Board
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