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Edward Devlin / NYSE/NASDAQ/AMEX 09/19/2012 www.gigawealth.net  
 
Name: New Residential Construction
Description: Monthly building permits and monthly housing starts published by the US Dept of Commerce
Assessor: System Administrator
 
Key Performance Indicator Analysis  
 
1. Importance Very important   New Residential Construction is very important because it is a bellweather of consumer spending on non-durables
2. Wisdom Important   As New Residential Construction goes, so goes consumer spending.
3. Knowledge Important   Housing starts need to be more than 800K per month to be considered Fair. In the past 50 years, from 1957 through 2007, housing starts have averaged about 1.5M per month.
4. Current Assessment Bad   Housing starts continue to be less than 800K per month. August 2012 were at a seasonally adjusted rate of 750K. That is up 30% since a year earlier.

Building permits were at a seasonally adjusted rate of 803K, which is about 25% better than a year earlier.

Privately-owned housing completions in August were at a seasonally adjusted annual rate of 689K, up 12% from a year earlier.

Reference:

  • NAHB: National Association of Home Builders

  • US Commerce Dept: US New Residential Construction news release
  • 5. Future Assessment Fair   Building permits and housing starts have been trending up, and should continue, going from Bad to Fair.
    6. Risk Medium   The housing recovery is still fragile. There is still a lot of inventory of foreclosed homes, undeveloped lots, as well as a lack of home buyers due to high unemployment.
     
     
    Probabilities, Reasons and Explanations
     
       Possible Outcome Probability Value Reasons and Explanations
    1. Awesome   > 1.5M Housing starts 0%
    2. Good   > 1.2M Housing starts 20%
    3. Fair   > 800K Housing starts 50%
    4. Bad   < 800K Housing starts 30%
    5. Terrible   < 500K Housing starts 0%
     
     
     
    Associated Information
     


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