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Economy in Brief

U.S. Housing Starts Fall Again After Tax Incentive Expires
by Tom Moeller July 20, 2010

Again, with the elimination of the government's program to stimulate housing, the sector's activity fell. June housing starts dropped another 5.0% m/m to 549,000 (AR) after a 14.9% May drop that was deeper than reported initially. The latest was the lowest since October and the May level was revised down from 593,000. June also was lower than Consensus expectations for 579,000 starts.

Starts of single-family homes slipped just 0.7% from May to 454,000, the lowest level since May of last year. In the Midwest starts fell 11.3% (-18.4% y/y) while  in the Northeast they fell 8.9% (+8.5% y/y). Working the other way, single-family starts in the South rose 3.6% (-2.1% y/y) while in the West they rose 3.1% (-4.8% y/y).Activity in the the multi-family sector weakened after two months of improvement. Starts of apartments, condominiums & town houses fell by nearly one-quarter m/m to 95,000.

A glimmer of good news in the report was that building permits during June rose 2.1% following two months of sharp decline. The increase was, however, due to higher permits to build multi-family homes which increased 19.6% from May (10.7% y/y) to the highest level since February of last year. Single-family permits fell 3.4% (-6.7% y/y) for the third consecutive month of decline.

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

Recovering from the Housing and Financial Crisis is from the Federal Reserve Bank of Dallas and it can be found here.

Housing Starts (000s, SAAR) June May April June Y/Y 2009 2008 2007
Total 549 578 679 -5.8% 554 900 1,342
  Single-Family 454 457 563 -4.6 442 616 1,036
  Multi-Family 95 121 116 -11.2 112 284 306
Starts By Region
  Northeast 63 71 84 -20.3 61 120 143
  Midwest 94 101 118 -10.5 95 134 206
  South 281 288 367 2.6 281 451 676
  West 111 118 110 -11.2 117 195 317
Building Permits 586 574 610 -2.3 583 896 1,392
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