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Economy in Brief

by Tom Moeller U.S. Housing Starts At Ten Year LowAugust 16, 2007

July housing starts fell a whopping 6.1% m/m to 1.381M units. Not only did to the decline slightly exceed Consensus expectations for a drop to 1.39M starts. It was to the lowest level since early 1997 and the month-to-month decline was the largest since this past January.

Single-family starts declined 7.3% to 1.07M units, down for the fifth month this year. In this sector, the drop in fact was to the lowest level since 1996.

Single family starts fell hard across the country with the Northeast leading the pack with a 12.0% (-7.8% y/y) decline. Single family starts in the Midwest also fell a hard a 9.2% (-25.8% y/y) and starts in the South fell 6.2% (-29.5% y/y). Finally, single family starts in West fell 6.4% (-21.2% y/y).

Starts of multi-family structures picked up a piece of the slack and posted just a 1.6% (-0.3% y/y) decline to 311,000.

Building permits also were weak and fell 2.8% m/m to their lowest level since 1996. Permits to build a single family home: the lowest since 1995.

The Role of House prices in Formulating Monetary Policy is a speech given by Federal Reserve Board Governor Frederic S. Mishkin.

Housing Starts (000s, AR) July June Y/Y 2006 2005 2004
Total 1,380 1,470 -20.9% 1,819 2,073 1,950
  Single-family 1,070 1,154 -25.4% 1,478 1,719 1,604
  Multi-family 311 316 -0.3% 341 354 345
Building Permits 1,373 1,413 -22.6% 1,834 2,159 2,058
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