It's still a little too soon to say everything is fine, but it's not too soon to acknowledge the possibility that the homebuilding market isn't in the dire straits some feared in may be in. Per this morning's report from the Census Bureau, last month's starts and issued permits were surprisingly, pleasantly strong.
The raw numbers: June's total starts were an annualized pace of 1.215 million, versus expectations of only 1.160 million. The number of permits issued for new construction grew to 1.254 million, annualized, compared to estimates of only 1.196 million. Last month's strong showing at least partially quenches some of the growing doubts about the foreseeable future, though it will take a couple more monthly advances to convincingly say the recent weakness was just a blip.
To that end, next week's existing homes sales and new homes sales reports will either underscore or reject today's starts and permits strength. Also, though rarely examined, look for June's construction spending report soon. As of May the annualized tally was $515.778 billion, down a bit from April's level but still plenty strong. Another good month on that front could also confirm the notion that home-construction stocks aren't the liabilities some observers have made them out to be.