Bloomberg News

U.S. Homebuilding Probably Rose in Quarter

April 17, 2012

A contractor builds a house at the KB Home Bella Monte community in Dublin, California on March 21, 2012. Photographer: David Paul Morris/Bloomberg

A contractor builds a house at the KB Home Bella Monte community in Dublin, California on March 21, 2012. Photographer: David Paul Morris/Bloomberg

Homebuilding in the U.S. probably climbed in March, marking the best quarter since 2008 and indicating the real-estate industry has steadied, economists said before a report today.

Housing starts increased to a 705,000 annual rate last month from a 698,000 pace in February, according to the median estimate of 82 economists surveyed by Bloomberg News. Starts probably averaged 703,000 in the first three months of 2012, the most since the third quarter of 2008.

Warmer weather alongside historically-low lending costs and faster job creation may have spurred more home construction at the beginning of 2012. While the number of single-family housing starts last year was the lowest on record, work on multifamily units is providing homebuilders with new business.

“Housing starts are starting to see stabilization,” said Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The numbers are still coming from a very low base, but there’s improvement. We’re also still contending with a lot of the effects from weather.”

The housing starts figures are due from the Commerce Department at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from 670,000 to 750,000.

The report may also show building permits slid by 0.7 percent to a 710,000 annual rate, according to the survey median. In February, the number of applications was at the highest level since October 2008.

Record Warmth

Record-breaking warm weather probably boosted construction last month. The average temperature in the U.S. was 51.1 degrees Fahrenheit (10.6 Celsius), 38.6 degrees warmer than the 20th century average and the hottest reported March in records going back to 1895, according to the National Oceanic and Atmospheric Administration.

Even so, low borrowing costs and better job prospects should support demand for new homes. The average rate on a 30- year fixed mortgage reached an all-time low of 3.87 percent in February and was just a point higher at 3.88 percent in the week ended April 12, according to data from Freddie Mac.

Demand for apartments and condos, buildings that house multiple families, has also kept construction up. Builders began work on 241,000 of such units at an annual pace last month, the second most in more than three years.

Buyers “are starting to feel pressure not to miss this moment,” Lennar Corp. (LEN:US) Chief Executive Officer Stuart Miller said during a March 27 conference call with analysts. “The fully-loaded cost of ownership is lower in the most-desirable markets than comparable rental rates.”

New-home orders increased 33 percent in the three months ended Feb. 29, the third-largest U.S. homebuilder by revenue said. Shares of the Miami-company rose to the highest level since 2007 after it reported the orders growth and net income that beat estimates.

Investors also are upbeat about prospects. The Standard & Poor’s Supercomposite Homebuilding Index (S15HOME) has advanced 21 percent since the end of last year, more than the 8.9 percent gain in the broader S&P 500.

                        Bloomberg Survey

==============================================================
                           Housing Building     Ind.     Cap.
                            Starts  Permits    Prod.    Util.
                            ,000’s   ,000’s     MOM%        %
==============================================================
Date of Release              04/17    04/17    04/17    04/17
Observation Period           March    March    March    March
--------------------------------------------------------------
Median                         705      710     0.3%    78.5%
Average                        704      709     0.2%    78.6%
High Forecast                  750      750     0.7%    79.4%
Low Forecast                   670      675    -0.6%    77.8%
Number of Participants          82       56       81       64
Previous                       698      715     0.0%    78.4%
--------------------------------------------------------------
4CAST                          690      680     0.2%    78.5%
ABN Amro                       705     ---      0.3%     ---
Action Economics               675      690     0.3%    78.5%
Aletti Gestielle               710      705     0.2%    78.5%
Ameriprise Financial           705      720     0.3%    78.5%
Analytical Synthesis           710      718     ---      ---
Banca Aletti                   710      700     0.1%    78.4%
Bank of Tokyo- Mitsubishi      710     ---      0.4%     ---
Bantleon Bank AG               720      730     0.5%     ---
Barclays Capital               720     ---      0.2%    78.6%
Bayerische Landesbank         ---      ---      0.2%    78.7%
BBVA                           700      710     0.2%    78.5%
BMO Capital Markets            700      716     0.4%    78.6%
BNP Paribas                    720     ---      0.2%    78.4%
BofA Merrill Lynch             705      710     0.3%     ---
Briefing.com                   700      700     0.1%    78.5%
Capital Economics              710     ---      0.1%    78.5%
CIBC World Markets             695      705     0.2%    78.5%
Citi                           700      710     0.1%    78.3%
ClearView Economics            680      700     0.4%    79.0%
Comerica                       705     ---      0.6%    79.4%
Commerzbank AG                 720      715     0.2%    78.5%
Credit Agricole CIB            705     ---      0.3%    78.6%
Credit Suisse                  690      725    -0.2%    78.2%
Daiwa Securities America       680     ---      0.2%     ---
Danske Bank                    725      715     0.4%     ---
DekaBank                       690      690     0.2%    78.5%
Desjardins Group               705      700     0.0%    78.3%
Deutsche Bank Securities       725      700    -0.1%    78.3%
Deutsche Postbank AG           720     ---      0.3%     ---
DZ Bank                        695      710     0.3%    78.4%
Exane                          710     ---      0.1%     ---
Fact & Opinion Economics       712     ---     -0.2%     ---
First Trust Advisors           705     ---      0.3%    78.6%
FTN Financial                  700      708     ---      ---
Helaba                         710      710     0.1%    78.5%
High Frequency Economics       725      715     0.0%    78.3%
HSBC Markets                   709      695     0.1%    78.3%
Hugh Johnson Advisors          700     ---      0.4%    78.6%
IDEAglobal                     705      720     0.3%    78.7%
IHS Global Insight             717      688     0.2%    78.4%
Informa Global Markets         685      680     0.5%    78.6%
ING Financial Markets          721      707     0.5%    78.6%
Insight Economics              685     ---      0.3%    78.7%
Intesa Sanpaulo                705      710     0.0%     ---
J.P. Morgan Chase              700      720     0.0%    78.3%
Janney Montgomery Scott        706      735     0.4%    78.7%
Jefferies & Co.                690      710     0.3%    78.6%
Landesbank Berlin              670      675     0.6%    78.7%
Landesbank BW                  705      710     0.7%    79.0%
Maria Fiorini Ramirez          700     ---      ---      ---
Market Securities              688     ---      0.1%     ---
MET Capital Advisors           705     ---      0.7%     ---
Mizuho Securities              684     ---     -0.1%    78.4%
Moody’s Analytics              710      730     0.6%    79.1%
Morgan Stanley & Co.           705     ---     -0.1%    78.2%
National Bank Financial        705      720     0.3%    78.6%
Natixis                        708     ---      0.4%    78.8%
Nomura Securities              738      739     0.4%    78.6%
Nord/LB                        700      720     0.4%    78.7%
OSK Group/DMG                  700     ---      0.3%     ---
O’Sullivan                     720      715     0.1%    78.4%
Parthenon Group                693      744     0.2%    78.5%
Pierpont Securities            700     ---     -0.1%    78.4%
PineBridge Investments         691     ---      0.5%     ---
PNC Bank                       710      700     0.2%    78.5%
Raiffeisenbank International   750      750     0.2%    78.8%
Raymond James                  725      720     0.2%    78.5%
RBC Capital Markets            675     ---      0.4%    78.6%
RBS Securities                 710     ---      0.3%    78.9%
Scotia Capital                 720      675    -0.1%     ---
Societe Generale               695      690     0.3%    78.6%
Standard & Poor’s              675      690     0.3%    78.5%
Standard Chartered             700      717     0.3%    78.6%
Stone & McCarthy Research      710      712    -0.6%    77.8%
TD Securities                  705      705     0.3%    78.6%
UBS                            710      700     0.1%     ---
UniCredit Research            ---      ---     -0.5%    78.1%
Union Investment               700      725     0.3%    78.7%
University of Maryland         690      705     0.4%    79.0%
Wells Fargo & Co.              696     ---      0.2%    78.5%
WestLB AG                      700      700     0.4%    78.6%
Westpac Banking Co.            691      697     0.4%     ---
Wrightson ICAP                 700      715     0.7%    78.9%
==============================================================

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • LEN
    (Lennar Corp)
    • $43.67 USD
    • -0.01
    • -0.02%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus