Housing starts bounce, permits fall in November

We just got housing starts figures for November. Here's what the numbers showed:

* Housing starts rose 3.9% to a seasonally adjusted annual rate of 550,000 from 534,000 in October. That was roughly in line with the forecast for a rate of 555,000. Building permits fell 4% to a 530,000 SAAR from 552,000 a month earlier. That missed the average forecast of 560,000.

* By property type, multifamily starts fell another 9.1%, the third month in a row of declines. That leaves multifamily starts at the lowest since June. However, single-family starts climbed 6.9% to the highest level since April. As for permits, multifamily issuance tanked 23% while single family permits rose 3% to a five-month high.

* Regionally, starts were generally strong. While they dipped 2.5% in the Northeast, starts gained 2.1% in the West, 2.3% in the South, and 15.8% in the Midwest. Permits were a mixed bag, declining 8.3% in the Northeast and 22.2% in the Midwest. They rose 1.9% in the South and 2.7% in the West.

The latest housing report has a little bit for everyone -- Grinches and Santa Claus-types alike. Single family starts rose to a seven-month high, with broad-based regional strength. Permit issuance was relatively healthy as well. But the apartment and condominium market continues to lag, with both starts and permits falling. That leaves the overall construction industry limping into the close of a relatively lousy year.

So what does 2011 have in store for housing? More signs of stabilization. House prices are cheap again, and the labor market is holding steady. Consumer confidence is firming a bit, while lending standards aren't getting tighter anymore. But "stabilization" isn't the same as "improving dramatically." Housing and construction lack the catalysts for a robust recovery. So if you'll pardon the pun, 2011 looks to be another rebuilding year.

Pending home sales surge in October

The National Association of Realtors just released pending home sales figures for October. Sales surged by a record 10.4% from September, much better than the 1% decline that economists were looking for. Sales were still down 22.4% from a year ago, however. The strength was relatively broad based with a 7.1% gain in the South, a 20% spike in the Northeast, and a 27% surge in the Midwest. Sales dipped 0.4% in the West.

Pending home sales leaped in October, with broad based strength around the country. The latest numbers contrast sharply with the lousy new home sales figures we recently got, suggesting that the used home market continues to capture the imagination of buyers. They're seeking out the best values, and right now, that means distressed used homes at attractive -- even fire sale -- prices. While I don't expect a vigorous recovery in housing, the data continues to point to stabilization. That's a definite step in the right direction.