Don't look now, but do I see the housing market stabilizing?

Whether or not you are currently in need of buying or selling a home, it will be a welcome wind that blows stability back into the housing market. Since the housing market brought about the downfall of our national economy a couple of years ago, we have all suffered the consequences of it. The consequences, in turn, resulted in immediate reform of lending practices, and from then to now we have drudged through the valley of darkness, waiting for the redemption of our real estate investments. Waiting for the first glimmer of light to reach our eyes and reveal that a healthy real estate market is in our future.  At long last, is that a light I see up ahead? Let's take a look!

U.S. Commerce Department: Housing Starts Are Up

According to the U.S. Commerce Department, single-family housing starts edged up 0.3% to a seasonally adjusted annual rate of 610,000 units in September.

“Builders are cautiously responding to the small improvement they are seeing in interest among potential home buyers,” noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “However, as consumer demand for new homes rises, a major limiting factor for a housing recovery continues to be builders’ inability to access credit for new construction.”

“Today’s numbers are in line with our latest builder surveys, which indicate that stability is slowly returning to the new-homes market following the declines we saw upon expiration of the home buyer tax credits and the slowing of economic growth this summer,” added NAHB Chief Economist David Crowe. “Builders are receiving more inquiries from potential customers and are carefully responding to renewed consumer interest, although their limited access to credit for new housing production is definitely hampering this process.”

All of the increase in housing production in September was due to improvement on the single-family side, which posted a 4.4% gain to a seasonally adjusted annual rate of 452,000 units—the strongest level since May of this year. Multifamily starts, which tend to exhibit greater volatility on a month-to-month basis, recorded a 9.7% decline to a 158,000-unit rate following a big increase in August.

On a regional basis, starts activity was mixed, with two regions posting gains and two posting declines for September. The Northeast and South registered gains of 2.9% and 4.8%, respectively, while the Midwest and West registered declines of 8.2% and 3.6%, respectively.

Permit issuance, which can be an indicator of future building activity, declined 5.5% to a seasonally adjusted annual rate of 539,000 units in September. This dip was due entirely to a 20.2% decline to a 134,000-unit rate on the more volatile multifamily side, while single-family permits remained virtually unchanged, edging up 0.5% to a 405,000-unit rate.

Regionally, permits fell across the board in September, with the Northeast posting a 1.5% decline, the Midwest a 4.3% decline, the South a 4.7% decline, and the West a 10.6% decline.

by RISMEDIA, October 27, 2010