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Economy in Brief

Housing Starts Lowest Since 2004
by Tom Moeller May 16, 2006

During April, housing starts fell 7.4% m/m to 1.849M units following the 6.4% March decline that was revised slightly shallower. Again, the decline by far exceeded Consensus expectations for a modest drop to 1.95M starts and reduced the number of starts to the lowest level since November 2004.

Since the peak this past January, total starts have fallen 18.4%.

Single-family starts dropped 5.6% to 1.535M units and added to the 10.3% March decline. The latest level is down 15.4% from the January peak and is the lowest since November 2004.

By region, single family housing starts were quite mixed last month. Starts in the South fell 15.9% m/m to a level that was off 19.9% from the January peak. In the West starts fell a moderate 3.6% but that added to the 19.1% slide in March and pulled the latest level down 22.0% from the February peak. In the Midwest single family starts moved in the opposite direction and reversed the prior month's decline with a 21.4% (+3.2% y/y) gain. In the Northeast starts also recovered the prior month's down draft and rose 6.7% though starts were still 17.7% off the January peak.

Multi family starts reversed the sharp March increase with a 15.1% decline to the lowest level since March of last years.

Building permits dropped by 5.4% for the third consecutive monthly decline and are off 10.7% from the peak last September.

Housing Starts (000s, AR) April Mar Y/Y 2005 2004 2003
Total 1,849 1,996 -11.1% 2,073 1,950 1,854
  Single-family 1,535 1,626 -8.6% 1,719 1,604 1,505
  Multi-family 314 370 -21.3% 354 345 349
Building Permits 1,984 2,097 -8.0% 2,144 2,057 1,8 88
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