According to the latest U.S. Census Bureau report regarding the new residential construction statistics for September 2012, the annual rate of housing starts and rate of building permits increased. This report sends a mixed signal as to the developments in the housing market.
Privately owned Housing starts hiked in September 2012: the seasonally adjusted annual rate settled at 872,000 compared with the revised rate of 758,000 in August 2012 – this change represents a 15% increase; further, the annual rate for September 2012 was also 34.8% above the September 2011 rate of 647,000.
From the housing starts point of view this is a strong positive report.
Further, in September the seasonally adjusted annual rate of building permits for privately owned housing reached 894,000 – an 11.6% gain compared with August’s annual rate of 801,000. The September 2012 rate was also 45.1% above the rate in September 2011.
This news provides a strong and positive signal for the progress in the U.S housing market as the housing starts and building permits rose on a monthly scale and yearly scale. From my perspective, of the two, the housing starts are more important when examining the changes of the U.S housing market. This recent substantial shift in the number of housing starts and building permits might be a seasonal effect because it seems too soon for the recent FOMC decision, in which the Fed will purchase mortgage backed securities in the months to come, to affect the housing market in such a manner.
As I have pointed out in previous posts, there is a supposed lagged (by one day) and negative correlation between the monthly changes in housing starts and daily shifts in gold price; i.e. as Housing starts annual rate increases, gold price tends to decline the following day. Therefore, all things being equal, the current rise in gold price might change direction and fall. Finally, this news may appreciate the value of the U.S dollar against major currencies.
Current gold price, short term futures (November 2012 delivery) is traded at $1,752.3 per t oz. a $6 increase as of 17:15*.
Euros to US dollar exchange rate is currently traded up at 1.3126 a 0.56% increase as of 17:15*.
(* GMT)
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