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Economy in Brief

U.S. Housing Starts Reach Eighteen Month High
by Tom Moeller May 18, 2010

Forward momentum behind the recovery in the housing market continued to develop last month. Housing starts rose 5.8% to 672,000 (AR) units from an upwardly revised 635,000 during March. The monthly gain powered starts up by 40.9% y/y. That annual comparison is biased since its base is the lowest level reached during the recession. Nevertheless, starts were at their highest in eighteen months. The figure also beat Consensus expectations for 650,000 starts.

Starts of single-family homes showed the greatest improvement versus a weather-depressed March level. The 10.2% m/m gain to 593,000 (53.6% y/y) was the fourth consecutive monthly rise. Single-family starts have now risen nearly two-thirds from the recession low. In the Midwest, single-family starts jumped 17.7% (40.9% y/y) and recovered all of the sharp March decline. Nevertheless, starts still were off nearly three-quarters from the 2006 high. Starts in the South rose 14.8% (69.0% y/y) and rose 5.3% (50.0% y/y) in the Northeast where starts were roughly double the January '09 low. To the downside, starts in the West fell 4.5% (28.9% y/y).

Weakness in starts of multi-family housing units continued. An 18.6% m/m decline to 79,000 reversed all of the March gain and left them 82.4% below the 2006 high. As a result, starts of apartments, condominiums & town houses remained near their record low.

Building permits during April fell 11.5% to the lowest level since October. Permits to build a single-family home fell 10.7% (+22.5% y/y). Permits to build multi-family homes fell 14.7% but were 13.0% higher than their low last July.

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

Housing Starts (000s, SAAR) April March February April y/y 2009 2008 2007
Total 672 635 612 40.9% 554 900 1,342
Single-Family 593 538 527 53.6 442 616 1,036
Multi-Family 79 97 78 -13.2 112 284 306
Building Permits 606 685 650 15.9 583 896 1,392
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