NEW YORK (Reuters) - Groundbreaking on U.S. homes fell unexpectedly in March, but permits for future construction rose to their highest level in 3 1/2 years, Commerce Department data showed on Tuesday.
GREGORY MILLER, CHIEF ECONOMIST, SUNTRUST BANKS INC., ATLANTA
“The production side of the housing market is in the early stages of recovery, but builders are shifting their composition of products from condos and single-family homes to apartment construction. It’s going to be rocky for awhile. You still have inventory overhang. There are also issues on the financing side of production as well as the mortgage side. The problem is getting over the financing hurdle. Lenders are still very concerned about where they put their capital.
“From a trend perspective, it is still on a rising path. Tentative is the best we could say about this.”
MARK FOSTER, WHO HELPS MANAGE $500 MILLION AT KIRR MARBACH & CO IN COLUMBUS, INDIANA
“Headlines looked a little softer than expectations, but weather was so mild earlier in the year we might have pulled some of the starts forward. But the trend looks good, it feels like the housing market is trying to form a bottom. We should see better numbers as we go forward.”
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON
“The housing data was mixed. On the one hand housing starts came in below expectations and on the other hand it was a strong month for permits, which bodes well for the months ahead. So the rise in permits kind of offsets the disappointing data. On balance it should not mean much for the market as investors remain focused on Europe and Spain in particular.”
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
“Housing starts realized a surprisingly large shift in activity in March, when the market was expecting a relatively small gain, as starts dropped a noted 5.8% fell to 654k. Permits also surprised, beating market expectations by jumping 4.5% to 747k. March is the second straight month permits have risen while starts lost momentum. Seeing as how permits lead construction, there should be an upwards correction in forthcoming starts figures. Despite the decline, starts are up 10.3% from March 2011. Permits, having assumed a stronger rising trend (down twice in the past seven months, while starts have been down in four month), are up 30.1% from last March.”
STOCKS: Stock index futures pare gains after housing data.
BONDS: Treasury debt prices trim losses.
FOREX: Dollar trims gains versus yen.
Americas Economics and Markets Desk; +1-646 223-6300