In the recent U.S. Census Bureau report regarding the new residential construction statistics for July 2013 it was stated that the annual rate of housing starts and the rate of building permits rose. The rate of growth was roughly as expected. This report sends a positive signal to progress of the U.S housing market.
Privately owned Housing starts increased in July 2013: the seasonally adjusted annual rate settled at 896,000 compared with the revised rate of 846,000 in June 2013 – this change represents a 5.9% gain; moreover, the annual rate for July 2013 was also 20.9% above the July 2012 rate of 741,000.
From the housing starts point of view this is a positive report.
Further, in July the seasonally adjusted annual rate of building permits for privately owned housing reached 943,000 – a 2.7% increase compared with June’s annual rate of 918,000. The July 2013 rate was also 12.4% above the rate in July 2012.
This news provides a positive signal for the path in the U.S housing market as the housing starts and the building permits rose on a monthly scale. Moreover, both parameters also increased 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 stated in previous posts, there is a supposed lagged (by one day) and negative correlation between the monthly changes in housing starts and daily changes in gold price; i.e. as Housing starts annual rate increases, gold price tends to fall the following day. Thus, all things being equal, next week, the price of gold might change direction and decline. Finally, this news may slightly depreciate the value of the U.S dollar against major currencies.
For more on this subject: