US Housing Starts at 4-Year High

New-home construction in the U.S. surged in September to the highest level in four years, a sign the industry is on the road to recovery. Starts jumped 15 percent to an 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The median estimate of 81 economists surveyed by Bloomberg called for 770,000. An increase in building permits may mean the gains will be sustained.

A pickup in sales stoked by record-low mortgage rates and population growth combined with dwindling supply indicates construction can continue strengthening, contributing more to economic growth. At the same time, the level of starts remains below the pre-recession peak, limiting how much the industry can boost the rate of expansion.

“The housing market certainly has turned,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who’s forecast for 790,000 starts was among the highest. “But we still have a long way to go. The good thing is that construction will pull employment with it.”

Stock-index futures extended earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.3 percent to 1,452.8 at 8:45 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.77 percent from 1.72 percent late yesterday.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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