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Economy in Brief

Housing Starts Plumb Six Year Low
by Tom Moeller November 17, 2006

In October, housing starts more than retraced the downwardly revised 4.9% September gain and fell 14.6% to the lowest level since July 2000. The latest result fell well short of Consensus expectations for 1.68M starts.

At 1.486M units, the October figure pulled the year-to-date average to 1.863 starts and 10.2% below the first ten months of 2005.

Single-family starts in October fell 15.9% to 1.177M, also the lowest level since July 2000. The year-to-date average level of single family starts fell 11.5% from 2005. Multi family starts in addition were down by 9.1% m/m.

By region, single family housing starts were weakest down South and fell 24.8% (-32.4% y/y). Starts also fell 9.1% (-32.9% y/y) out West, were 7.3% (-33.1% y/y) lower in the Midwest but in the Northeast single family starts rose 10.9% (-22.2% y/y).

Building permits fell 6.3% after a revised 5.2% September drop. The ninth monthly decline this year was to the lowest level since 1997. Permits to start single family homes fell 3.8% (-31.7% y/y), the lowest since 2000.

What Do Financial Asset Prices Say About the Housing Market? from the Board of Governors of the Federal Reserve System can be found here.

Housing Starts (000s, AR) October September Y/Y 2005 2004 2003
Total 1,486 1,740 -27.4% 2,073 1,950 1,854
  Single-family 1,177 1,400 -31.8% 1,719 1,604 1,505
  Multi-family 309 340 -3.4% 354 345 349
Building Permits 1,535 1,638 -28.0% 2,159 2,058 1,888
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