GO
Loading...

Enter multiple symbols separated by commas

Market Excited Over Housing Recovery

Builders Warn on Housing
Tim Boyle | Bloomberg | Getty Images

Starting to get excited about the housing recovery. And so is the Street: homebuilders up 4 to 6 percent Tuesday, leading the market.

(Read more: Yes, Housing Starts Surge, But Rentals Are the Drivers)

Today's October Housing Starts, at 894,000, were the best since July 2008. Critics note the gains last month were all in multifamily. Regardless, any kind of building is welcome at this point.

Housing Starts are up 42 percent year-over-year; single family starts are up 35 percent.

(Read more: The Housing Recovery Is Getting Real)

There's other signs that the housing recovery is real:

1) Existing Home Sales for October, out yesterday, were up 2.1 percent from September and 11 percent year-over-year

2) the NAHB Builder Survey for November was at 46, the highest since May, 2006 and well above expectations of 41

3) builder DR Horton said last week that order trends were strong.

(Read more: IRS Holds the Key to 'Fiscal Cliff' Rally)

Here are the trends I see:

1) the number of houses for sale are decreasing;

2) Household formations are increasing;

3) House prices are increasing, partly because the percentage of buyers to the number of houses for sale is increasing.

What's needed: an even stronger recovery in sales, which are still being held back by tight mortgage lending standards.

Homebuilding and Hurricane Sandy. Been asked about the influence of Sandy on starts. Nothing in October, and what effect there is will be fairly small because it will be spread out over a long time:

1) it takes cities some time to approve permits

2) Insurance collection takes time

—By CNBC's Bob Pisani

_____________________________
Bookmark CNBC Data Pages:

_____________________________

Want updates whenever a Trader Talk blog is filed? Follow me on Twitter: twitter.com/BobPisani.

Questions? Comments? tradertalk@cnbc.com

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street

  • Robert Shiller

    Nobel Prize-winning economist Robert Shiller says that his key valuation indicator is flashing warning signs.

  • Lael Brainard

    The Fed is in the early stages of an analysis on changes in bond market liquidity, amid signs that liquidity may be less resilient than in past.

  • Bill Gross

    Janus Capital acquired a majority interest in Kapstream Capital and said Kapstream's Palghat will support Bill Gross as co-portfolio manager of the Janus Global Unconstrained Bond strategy.