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Economy in Brief

U.S. Housing Starts Total Up Unexpectedly; Single Family & Permits Down
by Tom Moeller November 20, 2007

Overall, good weather helped housing starts to post a surprising 3.0% m/m gain in October to 1.229M units. Consensus expectations had been for little change at 1.20M starts and the prior month's level was little revised.

The surprise was that starts of multi-family structures recovered virtually all the prior month's plunge with a 44.4% rebound. It was from the lowest level since 1994.

Single-family starts continued downward for the seventh consecutive month with a 7.3% m/m decline. At 884M units single family starts fell to their lowest since 1991, off by more than one-half from the peak early last year.

By region, single family starts in the South suffered the worst m/m drop in a year with a 19.5% fall, down 56% from the 2006 peak. In the West single family starts fell 8.1% m/m but starts are off nearly two-thirds from the 2005 peak level. In the Midwest starts rose 15.% to finish 48% below the 2006 peak and single family starts in the Northeast rose for the second consecutive month with a 29.5% rise, but they're still 42% below the recent peak.

Continuing with downward momentum, building permits fell 6.6% (-24.5% y/y) for the fifth straight m/m decline. Single-family permits fell 8.0% (-31.0% y/y) and multi-family permits fell as well.

Asset Price Bubbles from the Federal Reserve Bank of San Francisco is available here.

Housing Starts (000s, AR) Oct Sept Y/Y 2006 2005 2004
Total 1,229 1,193 -16.4% 1,812 2,073 1,950
  Single-Family 884 954 -25.1% 1,474 1,719 1,604
  Multi-Family 345 239 9.4% 338 354 345
Building Permits 1,178 1,261 -24.5% 1,842 2,159 2,058
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