Connect with us

Economics

Housing starts and permits ruin Christmas for housing bears

Lead Analyst Logan Mohtashami explains what November’s data on housing starts and permits means for the housing market.
The post Housing starts and permits ruin Christmas for housing bears appeared first on HousingWire.

Published

on

Today, the U.S. Census Bureau reported that housing starts came in as a beat at 1,679,000 for November. The more critical number of housing permits came in 1,712,000, a solid uptick from last month, and we saw slightly positive revisions to previous numbers.

Housing starts data has been choppy lately, as we are all aware of the delays in building homes in America. However, with all that said, the critical indicators for all housing data were consistently positive in 2021. If you knew where to look and expected a moderation from the COVID-19 surge in make-up demand, you would have prevented yourself from the embarrassment of being a housing crash bear in 2021.

The builder’s confidence data had been rising for months now. At the same time, some people focused their attention on iBuyers, who don’t even account for 1% of total home sales in America. Rookies are always going to roll badly, as rookies do.

While new home sales aren’t booming in 2021, demand is still good enough to build more homes as the monthly supply of new homes is still below 6.5 months on a three-month average.

Building permits from from Census: Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,712,000.  This is 3.6 percent (±0.9 percent) above the revised October rate of 1,653,000 and is 0.9 percent (±2.0 percent)* above the November 2020 rate of 1,696,000.  Single‐family authorizations in November were at a rate of 1,103,000; this is 2.7 percent (±1.1 percent) above the revised October figure of 1,074,000.  Authorizations of units in buildings with five units or more were at a rate of 560,000 in November.

As we can see below, housing permits are not overheating like we saw in the last few years during the housing bubble years where mortgage credit was facilitated by exotic loan debt structures. Now, we have all legit high-quality homebuyers who are buying a home to live in with fixed low debt cost and rising wages.

Housing completion data — which I call the Grundy of economics after my tortoise — is slow. We are all aware of the delays due to supply shortages, but this data line has legs to move higher over time slowly.

Housing completions from Census: Privately‐owned housing completions in November were at a seasonally adjusted annual rate of 1,282,000.  This is 4.1 percent (±13.5 percent)* above the revised October estimate of 1,231,000 and is 3.1 percent (±13.6 percent)* above the November 2020 rate of 1,244,000.  Single‐family housing completions in November were at a rate of 910,000; this is 0.1 percent (±12.0 percent)* below the revised October rate of 911,000. The November rate for units in buildings with five units or more was 364,000.

Housing starts data has been choppy for some of the reasons I stated above. However, since we are close to Christmas and 2022 is around the corner, I can finally retire one of my most extended economic calls in the previous expansion. From 2008-2019, my premise for housing was that we would see the weakest housing recovery ever and that housing starts wouldn’t start a year at 1.5 million or higher until 2020-2024, when demand finally warrants it. We are finally here on schedule, which means that the low bar that housing enjoyed from 2008-2019 is also gone.

Housing starts from Census: Privately‐owned housing starts in November were at a seasonally adjusted annual rate of 1,679,000. This is 11.8 percent (±15.2 percent)* above the revised October estimate of 1,502,000 and is 8.3 percent (±14.3 percent)* above the November 2020 rate of 1,551,000.  Single‐family housing starts in November were at a rate of 1,173,000; this is 11.3 percent (±15.8 percent)* above the revised October figure of 1,054,000. The November rate for units in buildings with five units or more was 491,000. 

Next up for housing starts would be the new home sales report coming out next week. The previous report came in as a miss of estimates and negative revisions. However, as I wrote last month, the builder’s confidence data for months were telling you a different story, and today you got to see why looking forward-looking indicators like confidence and housing permits is vital. Even with the new home sales report coming in as a miss last month, there was another story to tell.

My rule of thumb for housing has always been that if the monthly supply on a three-month average is below 6.5 months, the builders will keep building homes no matter the labor shortage complaints and cost of materials; they find a way to get paid. Still, even with the increases we saw in the monthly supply data this year, we never broke above 6.5 months on a three-month average. Slow and steady wins this race, and as long as you’re not looking for a massive construction boom, you won’t be walking in the wrong path.

Another new twist to the housing story is the comeback in lumber prices! Some of the crazier housing crash addicts in 2021 believed that lumber prices collapsing early in the year were forecasting the collapsing of housing. Like I have often said, the most untalented economic people we have in our country are all housing crash addicts, but as professional grifters, they’re fantastic. Think about being part of the lost decade from 2012-2021 and then going all-in on the crash thesis due to COVID-19, only to move the goal post to 2021 due to forbearance. And then to end up this Christmas as one of the more fraudulent bearish American groups of our generation.

They watched our country have this epic recovery starting from April 7, 2020, and now know that they were forever left behind in the dust as they couldn’t stop screaming that housing was going to crash. In any case, I bet those same people aren’t saying housing is recovering because of higher lumber prices; a troll has always to keep the grift going.

The rise in lumber prices isn’t positive it’s a negative, as all it does is make housing more expensive, but this is the world of commodity prices, and it can get wild from time to time. With all this said, housing starts are still pushing through as supply for new homes is still low enough to keep building going.

Mortgage rates impact this sector significantly, and I talked about how housing can cool down if the 10-year yield can break above 1.94%, which wasn’t part of my forecast in 2021. It is currently at 1.43% even with all the hot economic data, hotter than average inflation data, and the Fed tapering with rate hikes in play next year. The 10-year yield looks just right to me; as I have said going back to April 7, 2020, when the recovery is here, the 10-year yield should be in a range between 1.33%-1.60%.

Housing shouldn’t be a sexy boom-and-crash story because it’s a necessity. Housing is the cost of shelter to your capacity to own the debt; it’s not an investment. Sometimes just good old tedious economic modeling work gets the job done in telling the story. During the past two years, the lack of economic training and experience from anyone talking about an impending collapse in housing in 2020 and 2021 has shown us all the emperor has no clothes.

Housing starts are growing because demand is up and monthly supply is down; keeping things simple sometimes shuts down the improper noise. The builders’ confidence rising months ago and the fact that monthly supply never broke above my crucial level of 6.5 months was your clue that this sector is fine. On Monday I will be coming out with my 2022 forecast — expect lots of charts — which I will also discuss on the HousingWire Daily podcast, where you can find me every Monday morning.

The post Housing starts and permits ruin Christmas for housing bears appeared first on HousingWire.

Read More

Continue Reading

Economics

Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum

Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum
PR Newswire
LAGUNA HILLS, Calif., May 17, 2022

LAGUNA HILLS, Calif., May 17, 2022 /PRNewswire/ — Elizabeth Pagliarini, COO…

Published

on

Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum

PR Newswire

LAGUNA HILLS, Calif., May 17, 2022 /PRNewswire/ -- Elizabeth Pagliarini, COO/CFO of Summit Healthcare REIT, Inc. ("Summit") joined five other industry leaders on the Executive Roundtable at the 9th Annual IMN Real Estate CFO & COO Forum at the Monarch Beach Resort in Dana Point, California. The panelists shared their thoughts and experiences regarding the post pandemic environment, namely the recovery progress and how businesses are changing, trends in tenant lease terms, and the transition back to working in the office and its implications for new hires. They also provided insights into the availability of financing and how terms have changed over the past six months, how they are managing supply chain crises, rising costs of sourcing and materials, and staffing shortages, the changes made to core processes over the past 18 months and whether these changes would be permanent, and how investor communications have changed in recent months.

About Summit Healthcare REIT, Inc. 
Summit is a publicly registered non-traded REIT that is currently focused on investing in seniors housing and care real estate located throughout the United States. The current portfolio includes interests in 53 facilities in 14 states. Please visit our website at: http://www.summithealthcarereit.com

This material does not constitute an offer to sell or a solicitation of an offer to buy Summit Healthcare REIT, Inc. 

This release may contain forward-looking statements relating to the business and financial outlook of Summit Healthcare REIT, Inc. that are based on our current expectations, estimates, forecasts and projections and are not guarantees of future performance. Actual results may differ materially from those expressed in these forward-looking statements, and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from any forward-looking statements contained in this release. Such factors include those described in the Risk Factors sections of the Company's annual report on Form 10-K for the year ended December 31, 2021, and the quarterly report for the period ended March 31, 2022. Forward-looking statements in this document speak only as of the date on which such statements were made, and we undertake no obligation to update any such statements that may become untrue because of subsequent events. We claim the safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

CONTACT
Chris Kavanagh
(800) 978-8136
ckavanagh@summithealthcarereit.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/summit-healthcare-reit-inc-coocfo-elizabeth-pagliarini-participates-in-the-9th-annual-imn-real-estate-cfo--coo-forum-301549445.html

SOURCE Summit Healthcare REIT, Inc.

Read More

Continue Reading

Economics

Trevali Provides Update on Search at Perkoa Mine: No Survivors Found in Refuge Chamber

Trevali Provides Update on Search at Perkoa Mine: No Survivors Found in Refuge Chamber
Canada NewsWire
VANCOUVER, BC, May 17, 2022

VANCOUVER, BC, May 17, 2022 /CNW/ – Trevali Mining Corporation (“Trevali” or the “Company”) (TSX: TV) (BVL: TV) (OTCQ…

Published

on

Trevali Provides Update on Search at Perkoa Mine: No Survivors Found in Refuge Chamber

Canada NewsWire

VANCOUVER, BC, May 17, 2022 /CNW/ - Trevali Mining Corporation ("Trevali" or the "Company") (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) reports that search and rescue team members reached the refuge chamber below Level 520 in the Perkoa Mine in Burkina Faso. The refuge chamber was found intact and with no one inside. It is now clear that none of the eight missing workers reached the refuge chamber.

The Company's search crews will continue to work at maximum capacity, 24-hours-per-day until the missing individuals are recovered.

"This is devastating news, and we would like to offer our deepest sympathies to our colleagues' families and friends during this difficult time," said Ricus Grimbeek, President and CEO. "We will continue our search efforts unabated and reaffirm our commitment to work at full-speed to find our colleagues."

Senior representatives of Trevali and the Perkoa Mine mining contractor Byrnecut have been in close communication with the families of the missing workers throughout the search process and will continue to offer support. The Company will also continue to work alongside the Burkinabe authorities and is grateful for the search assistance received from them as well as the Burkina Faso mining community. Out of respect for privacy of the workers' families and friends, the Company will not be publicly disclosing the names of the workers.

The Company will provide further details as more information becomes available.

About Trevali Mining Corporation

Trevali is a global base-metals mining Company headquartered in Vancouver, Canada. The bulk of Trevali's revenue is generated from zinc and lead concentrate production at its three operational assets: the 90%-owned Perkoa Mine in Burkina Faso, the 90%-owned Rosh Pinah Mine in Namibia, and the wholly owned Caribou Mine in northern New Brunswick, Canada. In addition, Trevali owns the Halfmile and Stratmat Properties and the Restigouche Deposit in New Brunswick, Canada. Trevali also owns an effective 44% interest in the Gergarub Project in Namibia. The Company's growth strategy is focused on the exploration, development, operation, and optimization of properties within its portfolio, as well as other mineral assets it may acquire that fit its strategic criteria. Trevali's vision is to be a responsible, top-tier operator of long-life, low-cost mines in stable pro-mining jurisdictions. Trevali is committed to socially responsible mining, working safely, ethically, and with integrity. Integrating responsible practices into its management systems, standards, and decision-making processes is essential to ensuring everyone and every community's long-term sustainability.

The shares of Trevali are listed on the TSX (symbol TV), the OTCQX (symbol TREVF), the Lima Stock Exchange (symbol TV), and the Frankfurt Exchange (symbol 4TI). For further details on Trevali, readers are referred to the Company's website (www.trevali.com) and to Canadian regulatory filings on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information and Statements

This news release contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). Forward-looking statements are based on the beliefs, expectations and opinions of management of the Company as of the date the statement are published, and the Company assumes no obligation to update any forward-looking statement, except as required by law. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects", "outlook", "guidance", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events including, but not limited to, statements with respect to the recovery efforts at Perkoa  including the Company's plans with respect thereto, the efficacy of the Company's pumping, decline ramp rehabilitation and de-watering activities and its efforts to restore electrical power and communications at the lower levels of Perkoa, the Company's ability to effectively dewater the mine and restore access to the lower levels of Perkoa, the results of any investigation of the flooding incident, the Company's assessment of the effect of the flooding on the safety and structural integrity of Perkoa's underground areas, the effect of the flooding on the cost of production at Perkoa, the length of time before underground mining operations can be recommenced safely at Perkoa, if at all, and the effect of the suspension of mine and milling operations at Perkoa on the Company's results of operations and metal production. As well, forward looking statements relate to the Company's growth strategies, the continued success of mineral exploration, the content, cost, timing and results of future exploration programs and life of mine expectancies, Trevali's ability to fund future exploration activities, estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses and title disputes or claims. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to the Company's search efforts and plans to remedy the impact of the flooding at the Perkoa Mine, including that such efforts and plans will not be effective or achieve their desired outcomes; actual results of current exploration activities, including the inherent uncertainty of mineral exploration and estimations of exploration targets; changes in project parameters as plans continue to be refined; future prices of zinc, lead, silver and other minerals and the anticipated sensitivity of our financial performance to such prices; possible variations in ore reserves, grade or recoveries; dependence on key personnel; potential conflicts of interest involving our directors and officers; labour pool constraints; labour disputes; availability of infrastructure required for the development of mining projects; delays or inability to obtain governmental and regulatory approvals for mining operations or financing or in the completion of development or construction activities; counterparty risks; increased operating and capital costs; foreign currency exchange rate fluctuations; operating in foreign jurisdictions with risk of changes to governmental regulation, including any new or ongoing decrees and regulations issued by any governmental authority in response to the COVID-19 pandemic; compliance with governmental regulations; compliance with environmental laws and regulations; land reclamation and mine closure obligations; challenges to title or ownership interest of our mineral properties; maintaining ongoing social license to operate; impact of climatic conditions on the Company's mining operations; corruption and bribery; limitations inherent in our insurance coverage; compliance with debt covenants; competition in the mining industry; our ability to integrate new acquisitions into our operations; cybersecurity threats; litigation; and other risks of the mining industry including, without limitation, other risks and uncertainties that are more fully described in the Company's annual information form, interim and annual audited consolidated financial statements and management's discussion and analysis of those statements, all of which are filed and available for review under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Trevali provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events may differ from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE Trevali Mining Corporation

Read More

Continue Reading

Spread & Containment

Japanese yen remains directionless

The Japanese yen has posted slight gains on Tuesday. In the North American session, USD/JPY is trading at 129.32, up 0.17% on the day. The US dollar pummelled…

Published

on

The Japanese yen has posted slight gains on Tuesday. In the North American session, USD/JPY is trading at 129.32, up 0.17% on the day.

The US dollar pummelled the yen in the months of March and April, but the yen has held its own in May. Still, USD/JPY remains at high levels and the 130 line, which has psychological significance, remains vulnerable. If there is a line in the sand for the Japanese government or the BoJ to intervene and prop up the yen, it certainly is not the 130 level, as the dollar broke through this line without a response. The yen is extremely sensitive to the US/Japan rate differential, and with the BoJ demonstrating that it will tenaciously defend its yield curve, the yen is at the mercy of Powell & Co.

Japan releases GDP for Q1 on Thursday. The markets are braced for a decline of 0.4%, after a respectable gain of 1.1% in Q4 of 2020. Investors never like to see negative growth, and a lower-than-expected GDP report will put downward pressure on the yen.

 

US retail sales within expectations

Over in the US, retail sales for April came in at 0.9%, just shy of the consensus estimate of 1.0%. Core retail sales rose 1.0%, above the forecast of 0.7% and close to the 1.1% gain in March. The numbers were not spectacular by any stretch, but were respectable, given that consumer confidence has weakened – the UoM Consumer Sentiment index fell to 59.42 in May, its lowest level since October 2011. US households continue to spend, despite a deterioration in consumer confidence. Wages are not keeping up with the cost of living, but consumers appear to be using savings which accumulated during the Covid pandemic.

.

USD/JPY Technical

  • USD/JPY is testing resistance at 1.2938, followed by resistance at 1.3123
  • There is support at 1.3000 and 1.2918

 

Read More

Continue Reading

Trending