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Economy in Brief

U.S. Housing Starts Rebound All Multi-Family
by Tom Moeller July 17, 2008

Housing starts rebounded smartly last month. The 9.1% m/m rise to 1.066M units by far exceeded Consensus expectations for .960M starts. The rise was, however, due solely to the multi-family sector.

Multi-family starts surged 42.1% last month to the highest level since January of 2006. In part, the rise was making up for sharp declines during two of the prior three months. By region, the pop in multi-family units was all in the Northeast. Elsewhere, they fell.

Single-family starts continued to slide. They fell 5.3% to 647,000 from a May level which was revised up slightly. The latest level was the lowest since January 1991. For 2Q as a whole, single family starts fell 7.9% from 1Q after that quarter's 11.9% decline.

Single-family housing starts in the Northeast reversed all of a May increase with a 9.2% (-44.9% y/y) decline. Starts in the West also continued lower with a 5.8% drop to the lowest level since January. In the Midwest, starts held at the lows of the year and fell 5.3% (-45.7% y/y) after an 8.7% May gain. Finally, single-family starts in the South reversed the May increase and fell 4.4% (-36.9% y/y), but they were at a new low for this cycle and the lowest since 1991.

Building permits recovered 11.6% but, here again, the rise was due solely to a 39.4% rise in multi-family. Permits to build single-family units fell 3.5% to the lowest level since 1991.

Housing Starts (000s, AR) June May Y/Y 2007 2006 2005
Total 1,066 977 -26.9% 1,344 1,812 2,073
  Single-Family 647 683 -43.0% 1,039 1,474 1,719
  Multi-Family 419 294 30.1% 304 338 354
Building Permits 1,091 978 -23.9% 1,371 1,842 2,159
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