Single-Family Housing Starts fell to a seasonally-adjusted, annualized 425,000 units in July, according to the Census Bureau.
A “Housing Start” is defined as a home on which construction has started and ground has broken.
Furthermore, Single-Family Housing Starts were revised lower for both May and June of this year, by 6,000 units and 2,000 units, respectively.
The data may be worthless, however.
Like in most months, the government’s official report states that the Housing Starts numbers have a margin of error exceeding their actual measurement. Mathematically, this renders the data statistically irrelevant.
- July Published Results : +4.9%
- July Margin of Error : ±8.9%
In other words, July Housing Starts made have increased by as much as 13.8%, or they may have dropped up to 4.0%. We won’t know for certain until several months from now, when the Census Bureau gathers more data.
Regardless, the trend in Housing Starts has been flat since last summer. July’s reading is in-line with the 12-month average and, not surprisingly, New Home Sales have been mostly flat over the same time span.
Also included in the Housing Starts report is the Building Permits tally. As compared to June, permits were higher by a half-percent nationwide, with varying results by region.
- Northeast : +2.9 percent from June
- Midwest : +0.0 percent from June
- South : -1.4 percent from June
- West : +4.9 percent from June
When permits are issued, 86 percent of them start construction within 60 days. This means that new home sales and housing stock should follow the Building Permits trend, but on a 2-month delay.
Expect improvement into the fall season.
Mortgage markets improved again last week. The combination of global economic uncertainty plus a dour outlook from the Federal Reserve pushed mortgage bonds to highs for 2011, and drove mortgage rates below their all-time lows.