Based on the latest U.S. Census Bureau report regarding the new residential construction statistics for March 2013, the annual rate of housing starts rose while rate of building permits slipped. This report sends a mixed signal as to the growth in the housing market.
Privately owned Housing starts rose in March 2013: the seasonally adjusted annual rate settled at 1,036,000 compared with the revised rate of 968,000 in February 2013 – this change represents a 7.0% gain; moreover, the annual rate for March 2013 was also 36.3% above the March 2012 rate of 721,000.
From the housing starts point of view this is a negative report.
On the other hand, in March the seasonally adjusted annual rate of building permits for privately owned housing reached 902,000 – a 3.9% decrease compared with February’s annual rate of 939,000. The March 2013 rate was still 17.3% above the rate in March 2012.
This news provides a mixed signal for the path in the U.S housing market as the housing starts rose while the building permits declined 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 stated in previous posts, there is a supposed lagged (by one day) and negative correlation between the monthly developments in housing starts and daily shifts in gold price; i.e. as Housing starts annual rate rises, gold price tends to decline the following day. Thus, all things being equal, today’s rally in gold price might change direction tomorrow. Finally, this news may slightly depreciate the value of the U.S dollar against major currencies.
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