The most recent New Construction Report from HUD and the Census Bureau was largely disappointing, with starts and permits both taking a step back.
New construction has been cited by many analysts as a key to improving the ongoing shortage of available homes for sale. Will starts and permits pick up in December’s report? The industry will find out when the report is released on Thursday, January 19.
Housing starts declined by 19 percent over-the-year in the report covering November, down to an annual rate of 1.09 million. Permits did not fare much better, falling by 6.6 over-the-year down to an annual rate of 1.2 million. Completions had a good month, rising by 25 percent over-the-year in November up to a rate of 1.22 million.
The decline in starts may have simply been a return to the norm, according to one economist.
“(October’s) construction report confirmed just how disappointing new construction has been this year,” realtor.com Chief Economist Jonathan Smoke said. “The seasonally adjusted rate of starts in November was down a whopping 19 percent from October, a much greater drop than anticipated. But the 26 percent increase in October was really an aberration, and can be attributed to factors such as mild weather and the 33-percent rise in multifamily starts.”
Presidential Inauguration, Friday, January 20
After two months of transition following November’s presidential election, Donald J. Trump is scheduled to be sworn in as the 45th President of the United States on Friday, January 20.
The housing industry has been following the transition closely. Trump has promised to roll back regulation for the housing industry. At the National Association of Home Builders’ 2016 Midyear Board Meeting in Miami last August, Trump said, “Overregulation, which is a big problem, is costing our economy 2 trillion dollars a year. Think of that. And you are a big beneficiary of overregulation, because there's nobody other than, I would say, the energy industry, that is overregulated more than the home building industry. Nobody.”
Trump’s pick for HUD Secretary, Dr. Ben Carson, testified before the Senate Banking Committee last week. Carson told the Committee, “Throughout my life, I have done things that many deemed impossible. I pledge to work with this Committee and the dedicated career staff at HUD to solve difficult, seemingly obstinate issues and address the needs of those who rely on the services provided by HUD.”
Steve Mnuchin, Trump’s choice for Treasury Secretary, has also promised to cut back regulations for the financial industry, particular in regard to the Dodd-Frank Act, which passed in 2010 and is considered by the Obama Administration to be one of its greatest achievements. Rumors have swirled around possible reform to the Consumer Financial Protection Bureau; citing Trump spokesperson Sean Spicer, the Huffington Post reported that Trump interviewed former U.S. Congressman Randy Neugebauer (R-Texas) for the position of CFPB Director. The term of the Bureau’s current Director, Richard Cordray, expires in July 2018.
Monday, January 16
Martin Luther King Day, All Markets Closed
Wednesday, January 18
Fed Beige Book. 2 p.m. EST
Thursday, January 19
HUD/Census Bureau New Residential Construction Report for December 2016, 8:30 a.m. EST
Confirmation hearing for Steve Mnuchin, Treasury Secretary-Designate, Senate Committee on Finance, 10 a.m. EST
Friday, January 20
Presidential Inauguration of Donald J. Trump