Photo: Doc Searls, Flickr
This week is all about housing data.Yesterday we got the latest homebuilder sentiment index, which was a disappointment, although not quite as bad when you looked under the hood.
Today, February housing starts.
Here’s a 10-second preview form Nomura:
Building permits increased by 1.6% in January and, according to the Census Bureau, a building permit results in a new start roughly within one month. This supports our expectation that housing starts increased by 1.0% to an annual rate of 706,000 units in February (Consensus: +0.1%). A jump in home builder sentiment in February also supports our forecast that building permits likely increased by 3.1% in February to an annual rate of 703,000 units (Consensus: +0.5%).
We’re still working off incredibly tiny numbers here, and the majority of Americans probably care more about the price of their homes, rather than the volume of new ones being built. But given the linkages between housing starts and jobs, and thus the overall direction of the economy, we’d argue this is a big deal.
One thing we’ve noted before is that the last time gas prices (blue line) became a major issue, in 2007, before the last recession, housing starts (red line) were already in the middle of a big downswing, so there was a slowdown in activity that made the economy particularly vulnerable. Now it’s the opposite.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.