Housing permits increased 6.2% in October, to the highest level in five years due to steady demand for multi-family buildings (15.3% increased in October followed by 20.1% increase in September) such as apartments. Single-family buildings showed minor recovery compared to multi-family buildings. But nonetheless, weak consumer confidence and higher mortgage rates are causing turbulence in the sector, which was weighted on the Fed officials as they are in the stage of discussing tapering plans.
Slow recovery on the job market is also a big concern for the housing market. It seems like there are multiple threats outstanding to judge the housing market is on its full-recovering stage. It is important to keep an eye on the full residential construction report which will be released on December 18th, to do more in depth analysis on the fundamental housing market improvements.
By Jenny Lee
Additional Resources: Bloomberg Economic Calendar