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Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims, housing permits and housing starts.
- Good news today on jobless claims and the future of new residential construction. While the new residential construction held steady in October, housing permits for both single family and multifamily construction showed a significant jump.
- Housing permits jumped 10.9 percent from the month before, while they increased 17.7 percent on a year-ago basis. The October annualized rate is at 0.653 million units which is remarkably higher than the consensus forecast for 0.605 million.
- Single-family permits increased 5.1 percent, while permits for structures with 5 or more units jumped 29.5 percent.
- Housing starts in October fell slightly, 0.3 percent. The October annualized number is at 0.628 million units, also up 16.5 percent on a year-ago basis. The dip in October was driven by an 8.3 percent decline in the multifamily factor, following a 35.0 percent jump in September. The single-family component bounced back 3.9 percent following a 2.6 percent decrease the month before.
- By region, the decrease was largest in the West, a 16.5 percent drop. Other regions grew, Northeast by 17.2 percent; the Midwest by 9.7 percent; and the South by 1.6 percent. Weakness in the single-family component is still affected by excess supply in some areas.
- Jobless claims continued to trend down, falling 5,000 claims to 388,000. This is the fourth week in the last five of decreasing initial claims. The four-week average also fell by 4,000 to 396,750. Economists generally suggest that claims below 400,000 indicate expansion of the workforce.
- Continuing claims dropped 57,000 to 3.608 million. Keep in mind that drop in continuing claims are a combination of new hiring and benefit expiration.
- Assuming new jobless claims stabilize, NAR expects about 1.5 net new jobs in the next 12 months.
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