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.
Jeffrey Gundlach - DoubleLine Overview
Bank Loans vs. High Yield
Fixed Income Asset Allocation
Global Developed Credit - Floating Rate
Low Duration Emerging Markets
Mortgage-Backed Securities - Total Return
Shiller Enhanced CAPE®
US Housing Market
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8-15-14 CNBC "DoubleLine's Gundlach: Could see U.S. 10-year yields go to 2.2%"
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02-12-14 "Gundlach: QE will not end in 2014"
02-12-14 "Gundlach: Market has discounted tapering" http://video.cnbc.com/gallery/?video=3000245506
04-14-14 "Housing Finance Reform"
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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- 2Q Economic Update – Multi-Assset Growth Strategy
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- The Blind Leading the Blind – Multi-Asset Growth Strategy
- 10 Frequently Asked Questions about DoubeLine Shiller Enhanced CAPE®
- Taper, U.S. Rates and Emerging Market Currencies: Can U.S. Economic Growth Weather the Storm?
Thursday, September 11, 2014 at 1:15 pm PT / 4:15 pm ET
"Opportunistic CMBS/CRE Strategy Launch"
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Tuesday, January 8, 2013
Jeffrey Gundlach "2013 Market Outlook: Year of the Snake"
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