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Economy in Brief

Housing Starts Show Turns Across Regions
by Robert Brusca September 17, 2009

Yr/Yr regional housing markets all are still declining, of course, but the pace of the drop is diminishing across each of the main regions. The turn is clear but to keep it in gear will require more growth. With the first time home buyer incentives coming off, home purchases will find a greater challenge to hold the uptrend. It is a good time to hold our breath and to wait and see how much of this turn remains in place. Hopefully with the incentives off, a stronger economy will provide the incentive for a lasting rebound in housing starts.

The table shows that the strength of the housing rebound is in the single family sector where these purchase incentives play strongly. For single family units, current strength is building momentum and permits are steadily strengthening as well, despite the date with the expiration for incentives.

The 2-4 unit sector is falling at an accelerated pace. Permits are showing some lift nonetheless. Multifamily starts are still very weak and despite that permits are improving.

Still the story of housing this month is that it was buoyed by gains in the multifamily sector even though that sector has weak trends. Single family starts fell sharply in the month. The small 2-4 unit sector also fell. This month growth was propped up by the sector that has showed the least promise. The homebuilder survey released on Sept 16th showed a one –point rise in that index. For the time being housing retains its upward momentum, however slight.

Housing Starts/Permits By Unit Size
Analytical Comparisons (Pct. Changes-Not Compounded)
  Total One Unit 2-4 Units 5 or more
In 000's of Units Starts Permits Starts Permits Starts Permits Starts Permits
This Month:Saar 598 579 479 462 4 19 115 98
Jul.2009 589 564 494 463 10 18 85 83
Jun.2009 590 570 478 433 11 23 101 114
3-month avg. 592 571 484 453 8 20 100 98
1-month % chg. 1.5% 2.7% -3.0% -0.2% -60.0% 5.6% 35.3% 18.1%
3-month % chg 8.5% 11.8% 17.1% 13.8% -55.6% 5.6% -13.5% 4.3%
6-month % chg 4.2% 5.3% 34.2% 21.3% -69.2% 11.8% -43.6% -35.5%
yr/yr % chg. -29.6% -32.4% -21.7% -15.7% -73.3% -44.1% -48.2% -64.4%
Drop from Max -73.7% -74.4% -73.7% -74.3% -95.2% -82.1% -73.6% -81.6%
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