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Economy in Brief

Housing Starts Stronger Than Expected
by Tom Moeller November 17, 2004

In October, housing starts rose 6.4% to 2.027M, the highest level of the year.Consensus expectations had been for 1.96M starts.

Single-family starts recouped nearly all of the prior month's decline with a 5.7% gain. Year to date single family starts averaged 1.605M, up 6.6% from last year's full year average. Multi-family starts rose 9.5% and the year to date average equals last year.

Building permits fell 0.7% m/m to 1.984M.

The Composite Housing Market Index from the National Association of Home Builders (NAHB) was stable in November t the downwardly revised October level of 71.

The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.

The index of current single family home sales also surged to its highest in a year and the index of expected sales in six months jumped the highest level since 1999.

During the last ten years there has been a 60% correlation between the level of single family housing starts and the NAHB Index.

Housing Starts (000s, AR) Oct Sept Y/Y 2003 2002 2001
Total 2,027 1,905 2.2% 1,8 53 1,7 10 1,601
  Single-family 1,645 1,556 0.1% 1,505 1,3 63 1,272
  Multi-family 3 82 349 12.7% 348 347 330
Building Permits 1,984 1 ,998 -1.5% 1,8 89 1,749 1,637
             
Nat'l Association of Home Builders Nov Oct Nov '03 2003 2002 2001
Composite Housing Market Index 7 1 71 7 0 64 61 56
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