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Economy in Brief

Housing Starts Recover A Bit
by Tom Moeller December 19, 2006

November housing starts recovered less than half of the previous month's little revised decline with a 6.7% increase. The gain to 1.588M was slightly better than Consensus expectations for a rise to 1.54M starts.

The year-to-date average for starts of 1.588M was 11.7% below the first eleven months of 2005.

Single-family starts in November rose 8.1% to 1.281M, recovering less than half of the October decline which was to the lowest level since July 2000. The year-to-date average level of single family starts was 12.6% below 2005.

Multi-family starts gained back just 1.3% of the 8.5% October drop and were down 4.5% during this year's first eleven months.

By region, single family housing starts in the South posted a 14.1% (-22.1% y/y) increase but that was only about half of the sharp October decline. Single family starts in the Northeast again were up (-13.6% y/y) but the gains during the last two months still have not recovered the precipitous 16.7% decline during September. Starts in the Midwest rose 1.5% (-37.6% y/y) and starts out West nudged up 1.4% (-38.5% y/y).

Building permits fell 3.0% after a little revised 5.2% decline during October. This tenth monthly decline this year was to the lowest level since 1997. Permits to start single family homes fell 3.1% (-33.3% y/y) for the second consecutive month to the lowest since 1997.

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) November October Y/Y  2005 2004 2003 
Total 1,588 1,488 -25.5%  2,073 1,950 1,854
  Single-family 1,281 1,185  -28.6%  1,719 1,604 1,505 
  Multi-family 303  303  -8.6%  354 345 349 
Building Permits 1,506  1,553  -31.3%  2,159 2,058 1,888
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