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News

Week of September 1, 2014 – New Housing Construction

Although housing has partially rebounded since the 2008 recession, there are several areas of the housing market that have yet to fully recover. A look at new housing construction and sales suggests a very one-sided recovery. In a recent report released by the Department of Housing and Urban Development, building permits, often considered a leading indicator for new housing starts, rose 8.1% month-over-month (MoM) to an seasonally-adjusted annualized rate (SAAR) annualized rate of 1.05 million during July. Although this figure marks the highest rate in 8 months, applications for permits have overwhelmingly been driven by demand for multi-family units. Over the past year multi-family building permits have increased by 14.1% compared to 3.9% of single family homes.

The strong demand in multi-family units was also evident in the latest figure for new housing starts. New housing starts increased to a SAAR of 1.09 million during July led by new multi-family starts which were up 44.7% year-over-year (YoY). To put this growth into perspective, new multi-family starts represented 40% of all new housing starts during July, the largest percentage since December 1985.


Source: U.S. Census Bureau and the Department of Housing and Urban Development

The market for new home sales has also had its share of struggles recently as sales declined for the second consecutive month to an annualized rate of 412,000 during July. Despite stronger YoY growth, inventory of new homes has reached a 4-year high of 205,000. At the current sales rate, this represents a six month supply, a level not seen since October 2011.

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Jeffrey Gundlach
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http://video.cnbc.com/gallery/?video=3000245159
02-12-14 "Gundlach: Market has discounted tapering" http://video.cnbc.com/gallery/?video=3000245506

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04-14-14 "Housing Finance Reform"
http://video.cnbc.com/gallery/?video=3000265427

Information presented was current as of the date the material was prepared by an outside party. DoubleLine assumes no duty to update this information.

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Tuesday, January 14, 2014 at 1:15 pm PT / 4:15 pm ET
Jeffrey Gundlach "Let the Race Begin! 2014 Markets: Year of the Horse"
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Thursday, June 27, 2013 at 1:15 pm PDT / 4:15 pm EDT
Jeffrey Gundlach "What in the World is Going On?" (Redux)
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Tuesday, January 8, 2013
Jeffrey Gundlach "2013 Market Outlook: Year of the Snake"
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