Have Homebuilder Stocks Run Too Far? - Real Time Insight
January 17 2013 - 4:43AM
Zacks
This morn, the U.S.
Census and HUD jointly announced new residential construction
statistics for December 2012.
Takeways?
We are doing a +30%
annual increase, in the rear view mirror, for both permits and
starts. Pretty impressive stuff!
Permits weren’t too
strong in December. Nonetheless, permits reached their
highest level since July 2008. Starts were very strong.
A 954,000 number in starts rounds to a million now.
This was the highest rate in four years.
Two-thirds of starts were
single family. One third was “5 units or more”, which are
apartments. By far, the apartment growth rate is the more
impressive of the two.
Is there more runway
here? 1.5 million in starts is what we need to meet U.S. population
growth.
However, the question for
investors is this “Have the homebuilders run up too far and too
fast?” The ishares Dow Jones Construction Index (ticker:ITB)
is up 68% over the last year.
My question for you
today….
If permits and starts are up +30% and broad share
indexes are up +68%, is it time for a pull-back in homebuilder
indexes?
Here is the data
--
BUILDING
PERMITS
Privately-owned housing
units authorized by building permits in December were at a
seasonally adjusted annual rate of 903,000. This is 0.3% (±1.0%)*
above the revised November rate of 900,000 and is 28.8% (±1.4%)
above the December 2011 estimate of 701,000.
Single-family
authorizations in December were at a rate of 578,000; this is 1.8%
(±1.0%) above the revised November figure of 568,000.
Authorizations of units in buildings with five units or more were
at a rate of 301,000 in December.
An estimated 813,400
housing units were authorized by building permits in 2012. This is
30.3% (±1.1%) above the 2011 figure of 624,100.
HOUSING
STARTS
Privately-owned housing
starts in December were at a seasonally adjusted annual rate of
954,000. This is 12.1% (±13.4%)* above the revised November
estimate of 851,000 and is 36.9% (±22.0%) above the December 2011
rate of 697,000.
Single-family housing
starts in December were at a rate of 616,000; this is 8.1% (±9.7%)*
above the revised November figure of 570,000. The December rate for
units in buildings with five units or more was 330,000.
An estimated 780,000
housing units were started in 2012. This is 28.1%(±2.6%) above the
2011 figure of 608,800.
ISHARS-DJ HO CO (ITB): ETF Research Reports
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