Housing Permits Spike For The Second Straight Month
A “Housing Start” is a privately-owned home on which construction has started. It’s an important gauge of housing health because it tracks new housing stock nationwide.
In December 2009, starts fell by nearly 7 percent.
The news is mildly disappointing but not too bad. The likely cause for the Housing Starts drop is December’s rough weather conditions. It’s tough to break ground when Mother Nature won’t coordinate and last month was especially hazardous in a lot of parts of the country.
More cheery, however, is that for the second straight month, Housing Permits exploded.
A housing permit is an certification from local government that authorizes construction. After posting a 7 percent gain in November, permits rose by another 8 percent in December.
It’s a signal that housing is, indeed, in recovery — despite the falling number of actual starts. More permits mean that builders plan to bring more homes on the market for what’s expected to be a very busy spring home-shopping season.
According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Therefore, Housing Starts should start rising soon anyway.
For home buyers, the news couldn’t be better.
With more homes coming online, competition among home sellers should increase, and that will suppress the rise in home prices in Chicago and nationwide.
It’s basic economics. When home supplies grow faster than home demand, prices fall.



November 6, 2009, Congress voted to extend and expand the First-Time Home Buyer Tax Credit program. There’s 100 days left to claim it.
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Despite the headlines, it’s important to remember that December’s jobs report wasn’t all bad news.
Data was sparse through 2010’s first trading week last week, setting the stage for a week of momentum trading.
FHA home loans are
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Mortgage markets were relatively flat last week during holiday-shortened trading. After starting the week with a Monday surge higher, mortgage rates settled down through Tuesday and remained somewhat flat into the early-close for New Year’s Eve.
It’s not only the real estate markets that differ from town to town — the Cost of Living does, too.
Brian Gefter
Scott Eisenberg







