Housing permits and starts for November: yet more evidence of an economy primed for takeoff in 2021
Housing permits and starts for November: yet more evidence of an economy primed for takeoff in 2021
If there was bad news yesterday in the further increase of initial jobless claims, there was also good news in the 10+ year highs in new housing permits.
Here’s the graph of permits (blue), single-family permits (red, right scale), and housing starts (green):
Not only total permits but also the much less noisy single-family permits made 13-year highs. While the much noisier starts didn’t, the only months in the past 13 years that were better were last December through this February.
Because housing construction involves spending on all sorts of trades in the following year, and spending on landscaping, appliances, and other furnishings thereafter, new home building is an excellent long leading indicator.
Bottom line: yet more evidence that once the pandemic is brought under control, the economy is primed for a very vigorous takeoff.
All I can think of is that the typical homebuyer has not lost their job since this started.
What is going to cause housing to boom is the return of the “3-martini lunch” as a fully deductible item.
What are the definitions of takeoff and recovery? It will take six months to vaccinate everyone. By then some things will have already risen.
According to realtors there has been an inventory shortage for over a year now. We get two or three direct marketing offers to buy our home each week from an assortment of “home buyer” purchase as is rackets. These scam artists are on to a twofer if not a three-fer. Families impacted by the downturn want to monetize their equity, while selling is hard for homes needing work by families needing money. Both interest rates and inventory are low. The buyer prospects would I expect to be households like our own where work from home had not impacted income while social distancing has lowered spending on travel and hospitality.
Another Covid-19 flip irony is that previously an in-ground pool was a liability for home sellers in my area, central VA plant hardiness zone 7. Now though here every family wants a swimming pool of their own. Pool builders are one of the few enterprises that have seen business more than double during the pandemic. Pool maintenance though had depended primarily upon demand from community pools, so that business is way down.