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US Housing Data Hits Post-Bubble Levels

by on November 27, 2013 4:08 am GMT
 

The building permits and housing price increase data reported during the US trading session reached levels not seen since the housing bubble burst.

Building permits for future construction hit five-and-a-half year highs in October. This suggests that there may still be demand for new homes in the eyes of the builders. Permits jumped to 1.03 million, or 6.2 percent seasonally-adjusted. This was the highest report since June 2008.

Building permits for multifamily homes decreased to 15.3 percent in October versus a 20.1 percent September.

However, higher mortgage rates have put a damper on the housing recovery as new home owners wait it out for rates to drop from current historically low levels.

Another contributing factor for the drop in new home owners is the lack of affordability. According to the S&P/Case-Shiller index, house prices increased, in September, to levels not seen since February 2006. The index rose 13.3 percent after a 12.8 percent rise in the month earlier.

Due to constraints in supplies, sellers are sticking firm with their offers while buyers fight for the reduced number of houses.

Notably, the two cities who had the highest increase in prices going into the bubble also gained the most in the most current reading: Las Vegas gained 29.1 percent and San Francisco gained 25.7 percent. New York was the lowest in the composite at 4.3 percent increase.

Case-Shiller Composite, September print.

Case-Shiller Composite, September print.