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Economy in Brief

U.S. Housing Starts Fall Yet Again
by Carol Stone September 19, 2007

Housing starts fell in August by 2.6% to 1.331M units. This result undershot Consensus expectations, which called for a decrease to 1.35M starts. July volume was revised from 1.38M to 1.367M.The August number was the smallest since May 1995.

Single-family starts declined 7.1% to 988,000 units. This pace is the first under 1.0M since March 1995 and the lowest since March 1993.

Single-family starts again fell in every region of the country in August. They were down 19.6% in the Northeast to just 74,000 (-37.7% y/y). In the West, they also had a big drop, 18.1% from July to 213,000 (-32.4% y/y). There is, though, a hint of stabilizing in the Midwest with "just" a 3.4% decrease to 172,000 (-14.4% y/y) and a mere 0.8% in the South to 529,000 (-26.6% y/y).

Starts of multi-family structures offset some of the weakness with a 12.8% increase to 343,000; July however was revised to 304,000 from the 311,000 reported last month. The August gain took place in the South, +77,000 in August and in the Midwest, +16.000; the Northeast saw a decline of 40,000, the West by 14,000.

Building permits were also weak, falling 5.9% m/m to 1.307M, their lowest level since March 1995. Permits to build a single-family home plunged 8.1% to just 926,000, their lowest since April 1995.

The Federal Reserve Board in one of its periodic "Bulletin" articles, presents the 2006 Home Mortgage Disclosure Act (HMDA) Data. This article, which emphasizes the cross-tabulation by county of home prices and serious mortgage delinquencies, can be found here.

Housing Starts (000s, AR) Aug July June Y/Y 2006 2005 2004
Total 1,331 1,367 1,468 -19.1% 1,812 2,073 1,950
  Single-Family 988 1,063 1,147 -27.1% 1,474 1,719 1,604
  Multi-Family 343 304 321 +17.9% 338 354 345
Building Permits 1,307 1,389 1,413 -24.5% 1,842 2,159 2,058
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