Recent Updates

  • US: Consumer Credit, Wholesale Trade (Jun), Employment Situation (Jul)
  • Global Sector PMI (Jul)
  • International Surveys: WMA Investor Outlook Survey (Jul)
  • Mauritius: CPI (Jul)
  • more updates...

Economy in Brief

U.S. Housing Starts' Fall To Record Low Paced By Lower Multi-family Building
by Tom Moeller May 19, 2009

Falling to the lowest level on record during April, total U.S. housing starts were off by more than one-half from one year ago. The Commerce Department reported that total housing starts of 458,000 (AR) were down 12.8% from March after that month's 8.5% decline. Modest revisions to the series extend back to 2007 and the latest figure compares to Consensus expectations for 523,000 starts.

The decline to the record low was led by a 46.1% month-to-month drop in starts of multi-family homes to 90,000. So weak was construction of apartments and condominiums that the decline pulled the level roughly three-quarters below April of last year.

As was the case last month, there is a sign in the latest report that a bottom in the housing market may be forming. Starts of single-family homes increased 2.8% from March after two months of having been unchanged. Regardless, single-family starts remained near the record low for the series which dates back to 1959 and the latest level was down eighty percent since the peak in early-2006. During the last ten years, there has been an 84% correlation between the q/q change in single-family starts and their contribution to quarterly GDP growth.

By region, starts of single-family units in the Northeast reversed all of their March rise with a 13.6% (-34.5% y/y) decline. Starts in the Midwest, however, rose to their highest level since November (-36.6% y/y). In the South, single-family starts continued weak. They fell to another record low (-47.6% y/y) but in the West starts jumped 26.6% (-50.6% y/y).

The latest level of building permits also plumbed a new record low last month with a 3.3% decline from March. Overall, permits were down by one-half from last April. Single-family home permits, a leading indicator of starts, however, ticked up 3.6% from March (-42.3% y/y).

The housing starts figures can be found in Haver's USECON database.

U.S. Household Deleveraging and Future Consumption Growth from the Federal Reserve Bank of San Francisco can be found here.

Housing Starts (000s, SAAR) April March February Y/Y 2008 2007 2006
Total 458 525 574 -54.2% 900 1,342 1,812
Single-Family 368 358 357 -45.6 616 1,036 1,474
Multi-Family 90 167 217 -72.3 285 306 338
Building Permits 494 511 550 -50.2 895 1,392 1,844
large image