According to the latest U.S. Census Bureau report regarding the new residential construction statistics for January 2013, the annual rate of housing starts declined while rate of building permits edged up. This report sends a mixed signal as to the growth in the housing market.
Privately owned Housing starts declined in January 2013: the seasonally adjusted annual rate settled at 890,000 compared with the revised rate of 973,000 in December 2012 – this change represents an 8.5% decrease; moreover, the annual rate for January 2013 was still 23.6% above the January 2012 rate of 720,000.
From the housing starts point of view this is a negative report.
On the other hand, in January the seasonally adjusted annual rate of building permits for privately owned housing reached 925,000 – a 1.8% increase compared with December’s annual rate of 909,000. The January 2013 rate was also 35.2% above the rate in January 2012.
This news provides a mixed signal for the direction in the U.S housing market as the housing starts declined while the building permits rose on a monthly scale. Nonetheless, both parameters rose on a yearly scale. From my perspective, of the two, the housing starts are more important when analyzing the developments in the U.S housing market.
As I have pointed out in previous posts, there is a supposed lagged (by one day) and negative correlation between the monthly shifts in housing starts and daily changes in gold price; i.e. as Housing starts annual rate declines, gold price tends to rise the following day. Thus, all things being equal, the current drop in gold price might change path tomorrow. Finally, this news may slightly depreciate the value of the U.S dollar against major currencies.
Current gold price (short term delivery) is traded at $1,589.42 per t oz. a $15.63 decrease as of 14:23*.
Silver price (short term delivery) is currently traded down at $28.9 per t oz. a 1.76% decrease as of 14:23*.
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