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Economy in Brief

Housing Starts Lifted By Mild Weather 
by Tom Moeller February 16, 2006

Housing starts jumped 14.5% m/m during January to 2.276M units, the highest since 1973, following a December decline which was revised shallower. New construction activity most certainly was aided by the record warm temperatures last month. Consensus expectations had been for a lesser rise to 2.02M starts.

A 12.8% spike in single-family starts to 1.819M, a new record, more than reversed a 10.5% decline during December. The benefit from mild weather was clear from the regional figures which indicated a 23.3% (21.4% y/y) surge in the Northeast and a 31.0% (19.6% y/y) gain in the Midwest. The continuing benefit from low mortgage interest rates also was evident as single family starts in the South rose 8.3% (-1.0% y/y) and in the West by 7.3% (-5.3% y/y).

Multi family starts also were helped by the warmth and jumped 21.9% m/m to a new record high. Building permits rounded out last month's strength with a 6.8% gain to the highest level since September.

Today's testimony of Chairman Ben S. Bernanke before the U.S. Senate Committee on Banking, Housing, and Urban Affairs was identical to yesterday's and is available here.

Housing Starts (000s, AR) Jan Dec Y/Y 2005 2004 2003
Total 2,276 1,988 4.0% 2,072 1,950 1,854
  Single-family 1,819 1,613 2.8% 1,716 1,604 1,505
  Multi-family 457 375 9.1% 355 345 349
Building Permits 2,217 2,075 3.8% 2,122 2,058 1,8 88
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