At least if the latest housing data from HSBC are any indication. Thanks to Across the Curve (here’s what the writer of the blog–I forget his name, but he’s good–has to say about the stats: “I mentioned in my opening that UBS economists took some solace from the fact that a poor housing starts number would have the beneficial effect of speeding the reduction in inventories. That process will eventually lead to stability in prices.
Well what they wished for came to pass as the housing data was a debacle at every level with permits and starts lower. And it looks as though the collapse is across regions and sectors.”
Here’s a summary of the HSBC data:
This is the note which HSBC sent out to clients on the Housing Starts Data. There is no recovery or stability brewing in housing market.
Housing starts continue to decline steeply, falling 17% in January to a new all-time low (back to 1959) of 466k (consensus 529k)
Starts are down 39% over the last three months, down 57% since last June, and down 79% since the cycle high in January 2006
Building permits fell 5% to 521k (consensus 525k), also hitting a new record low. Both starts and permits have fallen for seven straight months, with permits falling 54% over this period
In spite of this reduced activity, the month’s supply of new homes for sale rose to an all-time high of 12.9 months as of December. This overhang is likely to keep new construction quite low until home sales recover
Evidence of any sales improvement has been scant, although December pending home sales rose for the first time in four months (+6.3%), and the yesterday’s NAHB index showed a slight improvement in buyer traffic (+3pts to 11)