Big surge in August housing starts

[impik]

WASHINGTON (MarketWatch) - New construction of U.S. houses surged in August, the Commerce Department estimated Tuesday. Starts rose 10.5% in August to a seasonally adjusted 598,000 annualized units, much stronger than the 535,000 pace expected by economists surveyed by MarketWatch. This is the highest level since April. Starts in July were revised down slightly to a 541,000 rate compared with prior estimate of 546,000. Starts of new single-family homes rose 4.3% to a 438,000 rate in August, while starts of large apartment units rose 32.2% to 160,000. Building permits, a leading indicator of housing construction, rose 1.8% to a seasonally adjusted annual rate of 569,000.


http://www.marketwatch.com/story/august-housing-starts-jump-105-to-598000-2010-09-21

[marmar]

1. But why add a bunch of excess capacity to a market that's already got a massive oversupply?

Es loco.

[HughMoran]

2. Always a way to find the bad in good news

Damn! I'm laughing my ass off here.

:rofl:

[marmar]

3. Also known as reality.

And how is it good news if it floods the market with capacity it can't get rid of? Or are you one of those Reagan supply side types?

[HughMoran]

8. Not my reality

You have no idea where people are building versus where the glut is.

The point is that people are feeling confident enough to build new construction - this is a good thing.

[earthside]

4. It is bad news.

I heard recently that there is an inventory of 20 million homes/housing units presently in the U.S.

The last thing we need is a re-inflation of the housing bubble ... yet that seems to be what a lot of politicians, Wall Street gamblers and economists want.

This report is a sign that the kind of systemic changes we need to build a new economy are not in place; it means that we are going to be stuck in this stagnation for quite awhile to come.

[Kurt_and_Hunter]

7. Massive oversupply doesn't inflate a bubble.

Excess supply reduces prices.

[Kurt_and_Hunter]

6. Location

Not everywhere has a massive oversupply and, unlike something like oil, we can't just move houses from Nevada and Florida to less over-built areas.

Also, we have to ask what percentage of these new homes are on land that already held a home -- tear-down and rebuild projects. Those don't add to nominal supply, but to quality of supply.

Whatever pressure new home construction puts on the national housing market it is surely off-set by the national benefits of the employment and manufacturing involved in new houses.

This is good news.

[HughMoran]

9. Good point

:thumbsup:

[WI_DEM]

5. The economic news lately has been more positive