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Economy in Brief

· The table below shows the percent changes in starts and permits on different horizons without compounding. It shows that each measure except for the large projects (5 of more) is above its three-month average in March. This finding tends to reinforce the sense that there is some stability developing in the sector.  To be sure, all measures are down over 3 months and 12 months. Two-to-four unit projects alone are flat or up compared to six months. Firmness on the three-month horizon is mostly in the Midwest where there is a 23% bounce (annualized) and in the South where a -12% annual rate trims the -33% annual rate drop over 6 months. 
March 2007
Seas Adj Annual Rate Total One Unit 2- 4 Units 5 or more
In 000's of Units Starts Permits Starts Permits Starts Permits Starts Permits
This Month: 1,518 1,544 1,218 1,114 38 72 262 358
3-month avg 1,474 1,549 1,177 1,112 31 73 267 363
1-month % chg 0.8% 0.8% 2.0% 1.4% 22.6% 0.0% -6.8% -0.8%
3-month % chg -7.0% -4.3% -2.2% -4.6% -22.4% -4.0% -22.7% -3.2%
6-month % chg -11.9% -5.7% -12.6% -8.6% 31.0% 0.0% -13.2% 3.2%
yr/yr % chg -23.0% -25.9% -24.6% -28.4% 5.6% -13.3% -18.4% -19.9%
U.S. Housing Starts Hit a Plateau
by Robert Brusca April 17, 2007

We plot the trends by region to show the common patterns. Each region shows a long down slope reflecting the lasting weakness in housing across the nation. But then most regions show some stability - or at least a hint of it.

There is an outright bounce in the Midwest and somewhat slower erosion in the West. The South is still declining but is also slowing its pace of decline. The Northeast is unclear, having bounced in January, probably on the weather, then having started a new slide since then, but still not quite making a new low.

On balance, housing is still having troubles. The rise in starts this month came about only because of a DOWNWARD revision to the previous month. Had February not been revised lower the new level in March would have been a decline from February since the preliminary February reading was higher than the level of starts that now prevails in March. Even so the clearest evidence we have is that the pace of decline is slowing and that for the moment two of the three types of starts and the overall are above their 3-month average. Housing is still faltering but no longer seems to have the downward momentum. It’s sort of like a horror movie seen the second time around -- no longer any surprises and you’ve already seen the worst of it. But unlike the movie the second time around, you still don’t know where this one is going. Not for sure.

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