U.S. housing starts reach post-recession peak

There is a continuing improvement in the U.S. housing market. Housing starts are holding near the 1.2 million annualized mark, breaching this threshold for the second time since the recession began, and remaining only 5 thousand shy of their June peak. Better yet, the September figures appear more robust than those from three months prior, in light of the more pronounced strength in the single family segment - a measure that's less volatile and bodes well for ongoing medium-term strength.

On that note, while building permits - the best predictor of near-term starts - have pulled back to a six-month low, the decline is entirely due to the multifamily segment, which had in previous months experienced a surge of permitting due to regulatory changes in New York state. On the other hand, permits for single family homes remain only 2 thousand shy of their post-recession peaks.

Mortgage rates have averaged below 4% for the twelfth week straight, providing impetus to new home sales, which surged to their best showing of the post-recessionary period in August.

With the Fed increasingly likely to take a pass on a 2015 rate hike, borrowing costs look to remain highly supportive for the housing market, with residential investment likely to provide a welcome boost to economic activity over the coming quarters, says TD Economics.