Three recent economic reports all point to continued gains in housing. Existing home sales in November were 5.04 million units, up 5.9% from October and 14.5% from November, 2011. The upward trend continues. However, 22% of the sales were short sales or foreclosure transactions, indicating that the recovery is far from complete.
Housing permits and starts for November were also reported. Total permits rose 3.6% from October and 26.8% from November 2011. Similar results were reported for single family homes with permits flat compared to October and up 25.3% from November of last year. Starts, whcih jumped in the previous report, slipped back slightly as they lost 3% vs. October but were 21.6% ahead of this time last year. Single family starts were down 4.1% from October but up 22.8% from November 2011. Home construction has clearly turned the corner but with starts at 861,000 in this report, construction is far below the levels we should be seeing, especially given reports of low inventories in many parts of the country.
Housing is contributing to the economy — residential construction reported for third quarter 2012 GDP was up 13.5% from the second quarter at annual rates compared to 3.1% for overall GDP. Housing is about 2.7% of GDP but provided 10% of the growth in the third quarter punching way above its weight.