Highlights
September housing data appears in part to be coming off hurricane effects in August as starts jumped and permits eased back. But strength also appears to be more broad based than this effect. Housing starts in September rebounded a sharp 15.0 percent after declining 7.0 percent the month before. The September annualized pace of 0.658 million units topped the consensus forecast for 0.590 million units and is up 10.2 percent on a year-ago basis. The comeback in September was led by a monthly 51.3 percent surge in the multifamily component, following a 16.8 percent drop in August. The single-family component edged up 1.7 percent after a 2.8 percent decrease the month before.

By region, the jump in starts was led by an 18.1 percent increase in the West. Other regions also gained with Northeast up 12.7 percent; the Midwest up 9.3 percent; and the South up 15.7 percent. Only the increases in the Northeast and South were partially related to rebounding from hurricane effects in August.

Housing permits edged slipped 5.0 percent after rebounding 4.0 percent in August. The September rate of 0.594 million units annualized came in lower than analysts' projection for 0.620 million. Permits in September are up 5.7 percent on a year-ago basis.

The September starts report shows new housing activity to be stronger than expected. The big question is whether the demand exists to absorb added supply. Yesterday's modest improvement in the NAHB housing market index suggests that there could be some lift coming in new home sales. But home builders are not getting too optimistic as indicated by pullback in housing permits. At this point, caution is still a good idea.

On the news, equity futures rose moderately.

Market Consensus before announcement
Housing starts declined 5.0 percent in August, following a 2.3 percent decrease in July. The August annualized pace of 0.571 million units was down 5.8 percent on a year-ago basis. However, a rebound in permits suggests that some of the weakness in starts was weather related as Hurricane Irene likely weighed on new groundbreaking in the Northeast and parts of the South. In contrast to starts, housing permits rebounded 3.2 percent, following a 2.6 percent contraction in July. Permit issuance is less affected by weather since they are issued indoors.

2011 Release Schedule

Released On: 1/19 2/16 3/16 4/19 5/17 6/16 7/19 8/16 9/20 10/19 11/17 12/20 Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov