-->The U.S. Commerce Department’s Census Bureau and the U.S. Department of Housing and Urban Development jointly announced
the following new residential construction statistics for September 2004:
BUILDING PERMITS
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 2,005,000. This
is 1.8 percent (±0.9%) above the revised August rate of 1,969,000 and is 3.2 percent (±1.1%) above the September 2003 estimate of
1,943,000.
Single-family authorizations in September were at a rate of 1,558,000; this is 0.1 percent (±0.8%) above the August figure of 1,556,000.
Authorizations of units in buildings with five units or more were at a rate of 358,000 in September.
HOUSING STARTS
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,898,000. This is 6.0 percent (±5.4%) below
the revised August estimate of 2,020,000 and is 1.2 percent (±5.9%) below the September 2003 rate of 1,922,000.
Single-family housing starts in September 2004 were at a rate of 1,540,000; this is 8.2 percent (±5.1%) below the August figure of
1,678,000. The September estimate for units in buildings with five units or more was 328,000.
HOUSING COMPLETIONS
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1,791,000. This is 6.2 percent (±6.4%)
below the revised August estimate of 1,909,000, but is 5.5 percent (±7.6%) above the September 2003 rate of 1,697,000.
Single-family housing completions in September 2004 were at a rate of 1,545,000; this is 0.1 percent (±7.9%) above the August figure
of 1,544,000. The September rate for units in buildings with five units or more was 229,000.

-->Auszug aus Studie vom 15.10:


TROUBLE IS BREWING IN THE HOUSING MARKET

The risk of a housing market downturn is rising. First, over the past year, prices finally seem to have risen beyond the level justified by interest rates and household incomes. Currently, we estimate that the market is overvalued by just under 10%.....

Second, there are some signs of excess supply. Although vacancy rates send mixed signals, inventories of unsold homes are rising quickly. Moreover, the current pace of new construction seems to have exceed the long term trend in household formation. This siggests that housing starts may need to decline if a glut of new homes is to be avoided.

Third, homebuyers seem to have developed a speculative mindset. Existing homes are turning over at an unusually rapid pace and a recent survey of US homebuyers found wildly inflated expectations for future home price gains....

THE KEY DOWNSIDE RISK TO THE ECONOMY

We conclude that the american US housing market looks overstretched on a number of indicators. If there is a bubble it seems to have emerged relatively recently and is certainly relatively smaller than in other English speaking countries as Australia and the UK. But even a smaller bubble would be worrisome given the extent to which the US economy has relied on a strong housing market to support GDP growth in recent years. Small open economies can rely on external demand to pull them through a housing and domestic demand bust. But that is much harder for the United States.

If housing does turn down, the implications for growth and interest rates could be severe. If housing starts declined 10% to 20% in each of the next two years, the housing sector would shave 1/4 to 1/2 percentage point from real GDP growth, after adding an average of 1/2 percentage point in the last two years. More importantly, a decline in housing prices could put substantial upward pressure on the personal savings rate. This would increase the likelihood that the inevitable increase in the savings rate in the next five to ten years might occur in an abrupt rather than gradual fashion. Therefore, we view the housing market as the key downside risk to our baseline forecast that US growth will fall short of consensus expectations but will escape a full blown recession in near term.

Grüße

Per