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Economy in Brief

Building Permits Down Sharply in 8 of 9 Census Divisions; Only Oil Patch Shows Gain
by Carol Stone October 26, 2006

It's almost unanimous. Housing is slumping in almost every region of the country. The Census Bureau reported building permit data today for September and the year-to-date for regions, divisions, states and metro areas as well as counties and individual "permit-issuing places", i.e., towns. These data include the number of units, the number of separate buildings and their aggregate value. Haver maintains these in the PERMITY and other PERMIT databases, which are part of our REGIONAL offerings.

As we know, total building permits for the nation have fallen in every month since January; September's were off 5.2% from August (seasonally adjusted) and 31% from a year ago (not seasonally adjusted). Single-family housing permits were down 5.1% from August and 35.6% from September 2005.

The Regional permit data for single-family houses show a year-to-date decline of 13.9% from the comparable period of 2005. Every "division" of the country except "West South Central" has participated in this contraction. The biggest declines in single-family units have been in the Pacific states and the East North Central, both down about 22%. In value terms, the total dollar value of building permits in the Pacific states is down 18.9% and in the East North Central division, 17.8%. The Pacific states include California, Washington, Oregon, Alaska and Hawaii. The East North Central group includes Illinois, Indiana, Michigan, Ohio and Wisconsin.

The West South Central division comprises Arkansas, Louisiana, Oklahoma and Texas. This area is benefiting from the surge in energy prices and is also the subject of much rebuilding effort after last year's hurricanes. This latter effect is not yet fully evident, though; permits in New Orleans are still very low, but they have rebounded in Gulfport-Biloxi, Mississippi and Lafayette, Louisiana. In Texas, the energy factor is a notable stimulus: there are major gains in the Midland-Odessa areas in the West Texas oil fields and also in Houston, Dallas and Waco. Even so, in the West South Central division as a whole, the momentum is flagging. In the East South Central States, which include Mississippi plus Alabama, Kentucky and Tennessee, the number of permits is down slightly and their value is up. For all Census divisions, the value of permits is not as weak as the number, indicating persisting increases in the value per unit. We did not examine the month-by-month data to see if this is ongoing or if it has petered out as the year has worn on for the weakening housing market and as other home price measures show outright declines. Indeed, the year-on-year price declines in national data for new and existing home sales set in just in the last couple of months, so the year-to-date could still be up from last year. This isn't likely to last much longer, though.

Year-to-Date Through September
Building Permits, Single-Family Houses, by Division Type
2006 2005 2004 2003
New England Number 26,518 32,563 31,764 28,359
Value (Mil.$) $5,239 $6,251 $5,790 $4,852
Middle Atlantic Number 56,757 63,581 65,702 59,903
Value (Mil.$) $10,100 $10,902 $10,318 $8,820
East North Central Number 117,179 150,249 149,104 145,138
Value (Mil.$) $21,355 $25,970 $24,768 $22,711
West North Central Number 58,730 73,264 71,593 68,881
Value (Mil.$) $10,170 $11,923 $11,015 $10,061
South Atlantic Number 345,613 399,893 357,661 312,148
Value (Mil.$) $59,597 $64,069 $52,141 $42,545
East South Central Number 70,270 71,707 70,193 62,550
Value (Mil.$) $10,438 $10,113 $9,219 $7,588
West South Central Number 167,220 161,940 143,032 133,465
Value (Mil.$) $25,323 $23,021 $19,373 $17,180
Mountain Number 142,321 173,719 162,029 134,341
Value (Mil.$) $26,159 $29,327 $25,438 $19,450
Pacific Number 137,741 177,339 168,764 154,026
Value (Mil.$) $29,389 $36,225 $33,374 $28,782
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