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Economy in Brief

U.S. Housing Starts Improve With Better Weather
by Tom Moeller April 16, 2010

Improved weather last month helped housing starts rise 1.6% from February to 626,000 units (AR). Also good news from the housing sector was that snowstorms didn't depress activity by 5.9% from January as previously reported but instead February starts rose modestly. Consensus expectations had been for 610,000 starts in March.

Starts of multi-family housing units accounted for the increase in March activity. Moreover, the upward revision to February to a lesser decline from January was behind much of the revision. Starts of apartments, condominiums & town houses recovered most of the February decline with an 18.8% increase but they still were down 40.6% from last March. Regardless, the q/q increase in starts was the first of this cycle.

Despite their 0.9% m/m decline from February, starts of single-family homes also showed improvement. The decline was from an upwardly revised February level. It now shows an increase from January instead of the sharp decline reported earlier. Starts rose 48.7% from the recession low during February 2009. Single-family starts in the Northeast rose 5.6% during March and were more-than-double the January '09 low. In the Midwest, single-family starts fell by one-third from February (+19.0% y/y) and reversed all of the February gain. Though starts rose from their January '09 low ,they remained down three-quarters from the 2005 high. Starts in the South rose 9.9% (47.7% y/y) and in the West they rose 0.9% (82.8% y/y).

During March, building permits rose 7.5% following a 2.4% February increase. Permits to build a single-family home rose 5.6% and were up 58.8% from the low in January '09. Permits to build multi-family homes rose 15.4% and were 40.6% higher than their low last July.

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

Coordination of Expectations in the Recent Crisis: Private Actions and Policy Responses from the Federal Reserve Bank of Kansas City is available here.

Housing Starts (000s, SAAR) March February January March Y/Y 2009 2008 2007
Total 626 616 609 20.2% 553 900 1,342
Single-Family 531 536 507 47.1 440 616 1,036
Multi-Family 95 80 102 -40.6 113 285 306
Building Permits 685 637 622 34.1 558 895 1,392
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