Today new home construction and builder’s confidence reports were released. The builder’s confidence number remained unchanged month-to-month which is lower than the full year average for 2017. The new construction was much better up to 1.282 million, an increase of 9.2% for August. That is a very good number though it was lower than the recent peak in May of 1.3 million. Construction of single family units grew only 1.2%, so much of growth came from multi-units. Permits for single family homes fell 6.1% which most economists feel is a critical component of the housing industry.
It appears housing has stalled somewhat and though it might get a bump up from the damage done by the recent hurricane it will not add to the U.S. GDP for the fourth quarter. Home prices are becoming the head wind for further home ownership. Also the new tax law is having some effect on high end homes in high tax states. The tax right off of mortgage interest and property tax has been limited on a per year basis and buyers are hesitant after losing some of the tax benefit of home ownership.
Housing is not weak it is only slowing and likely to continue to do so as fall and winter approach. The summer selling season however was not a success as expectations were much higher than the actual results.