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Economy in Brief

U.S. Housing Starts April Rise Due to Multi-Family, Single-Family at 27 Year Low
by Tom Moeller May 16, 2008

Housing starts rose unexpectedly during April to 1,032,000 units (AR), an increase of 8.2% following the March decline of 13.8% which was deeper than reported initially. The latest figure was firmer than Consensus expectations for 940,000 starts.

All of the rise in starts last month was due to a 36.0% m/m increase in starts of multi-family units. It recovered nearly all of a March decline that was deeper than reported last month.

Single family starts last month fell 1.7% to 692,000 but the March decline of 2.5% was roughly half the drop reported initially. Nevertheless, single family starts in April were at the lowest level since January of 1991. They have fallen 62.0% since their January 2006 peak. Starts began this quarter 4.6% below the 1Q average.

By region, declines in April starts were spread evenly across the country. In the Northeast single family starts fell 7.2% (-38.5% y/y) to a record low. In the South, single family starts fell 6.6% (-42.9% y/y) to the lowest level since 1991 but in the West single family starts reversed the March decline. Starts rose 8.3% (-43.3% y/y) although they remained down by nearly two-thirds from the August 2005 peak. In the Midwest single family starts rose 5.0% (-40.1% y/y) and they were down 71.0% from the February 2005 peak.

Building permits reversed the March decline. The total rose 4.9% paced by a 4.0% (-40.1% y/y) increase in single-family permits.

Boom and Gloom in the Housing Markets: The Sequel from the Reserve Bank of St. Louis can be found here.

The Federal Response to Home Mortgage Distress: Lessons from the Great Depression, also from the Federal Reserve Bank of St. Louis, is available here.

Housing Starts (000s, AR) April March Y/Y 2007 2006 2005
Total 1,032 954 -30.6% 1,344 1,812 2,073
  Single-Family 692 704 -42.2% 1,039 1,474 1,719
  Multi-Family 340 250 17.6% 304 338 354
Building Permits 978 932 -34.3% 1,371 1,842 2,159
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