Economic Reports, Housing Starts, Random Thoughts, Real Estate
Housing Starts Rise In April, Home Prices Under Pressure
May 19, 2010 by James K Barath, CMPS · Leave a Comment
Single-family Housing Starts rose by 55,000 last month, suggesting ample housing stock from which home buyers in Chesterton Indiana can choose this summer.
The report is a slightly larger read than what economists had expected.
Furthermore, for the first time since June 2009, Housing Starts appears to have broken away from its half-million unit plateau. 593,000 new homes were started in April.
Ordinarily, both Wall Street and Main Street would celebrate a strong housing sector report like this, but the Department of Commerce’s press release also held two cautionary notes.
The first point of caution is a mathematical one. Although single-family starts increased by 10.2 percent, the survey had a Margin of Error of 10.7 percent. This means that Housing Starts may have fallen by 0.5 percent and the report is statistically worthless.
The second point of caution is tied to Building Permits, a complementary data point in the same Department of Commerce report. In April, Building Permits fell by almost 11 percent with a tiny Margin of Error of less than 2%. This tells us that builders are pulling back — a sign of low housing market confidence
According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Housing Starts, therefore, should ease though June and July.
Home prices are based on housing’s supply and demand. For the next few months, supply should elevate, helping prices remain suppressed, after which, supply should dwindle.
The best time to buy a home, therefore, may be now. As the summer months come to close, we may find that buyers vastly outweigh sellers.
About the Author: James K Barath is a Certified Mortgage Planning Specialist, qualified liability advisor and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James Barath today for your Borrow Smart Analysis - the CALM Approach to Borrowing ! His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy! 
