Chart of the week
Building permits have continued the upward trend that started this summer, rising 5% in October to reach another cycle high. This growth trajectory concerns both the volatile multi-family and more stable single-family sectors, with the latter being the better trend indicator.
The increase in building permits is part of an overall improvement in the property market, which has seen a rebound in housing sales and developer confidence alike.
The housing sector appears to be benefiting from improved household purchasing power due to lower mortgage rates and a slower pace of house price rises. This is boosting both sales and construction amid persistently low housing stocks.
The property market upswing is a reassuring sign for the economy: with the exception of 2001, past recessions have always been foreshadowed by downtrends in building permits.
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The opinion expressed above is dated 21 November 2019, and liable to change.
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