subject: Home Construction Number One to Watch [print this page] Keep in mind the entire market seems to be trading from the short side ( or not long enough) and the Obama speech on CNBC pushed the markets thru important resistance levelin all major indexes. Now we must pay attention to the Fed and Economic numbers releseased this week which can effect this move in the market.
Home construction is expected to show a small gain in August, but the outlook for builders is still grim. Economists expect construction of new homes and apartments in August to have inched up to a seasonally adjusted annual rate of about 550,000, up less than 1 percent from a month earlier, according to a survey by Thomson Reuters.
The Commerce Department report is scheduled to be released at 8:30 a.m. EDT Tuesday. Builders are struggling with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market. The latest evidence of the soft housing market came Monday. The National Association of Home Builders said its monthly index of builders' sentiment was unchanged in September at 13. The index has now been at the lowest level since March 2009 for two straight months. Foot traffic from prospective buyers, an indication of future sales, fell slightly. The index measuring expectations for the next six months was unchanged. Current sales conditions were also unchanged.
Construction of new homes and apartments rose 1.7 percent in July. But that gain was driven by apartment and condominium construction, a small part of the market. Construction of single-family homes, which represents 80 percent of the market, fell more than 4 percent. And requests for building permits, a sign of future activity, fell 3 percent.
Builders say demand remains weak, especially after federal tax credits for buyers expired in April. Lennar Corp., a major builder based in Miami, said Monday the number of buyers signing agreements to purchase its homes fell 15 percent from a year ago in the three months ended August 31. "It's been a tough summer," said Stuart Miller, Lennar's chief executive. on a conference call with investors Monday. "As we've gone into September, we're seeing a little bit of pickup in our traffic, but that shouldn't be cause to have a sigh of relief at this point."
