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Economy in Brief

U.S. Housing Starts Rise Unexpectedly Due To Multi-Family Jump
by Tom Moeller   September 21, 2010

Housing starts improved last month to the highest level since April; just before the expiration of the government's home buyer tax credit. August housing starts improved 10.5% m/m to 598,000 (AR) after a 0.4% July uptick which was slightly less than reported initially. The improvement pulled starts 25.4% above the low of the last recession and the August level was higher than Consensus expectations for 550,000 starts.

Last month's gain was due largely to a near one-third rise in starts of multi-family units. Starts of apartments, condominiums & town houses jumped to 160,000 units and were one-half above the year-ago level. Starts of single-family homes rose a lesser 4.3% to 438,000 and that did not make up the July decline. A roughly one-third gain in starts in the West led last month's increase. However, here too, single-family starts just made up the July decline and remained down 18.6% y/y. In the Midwest starts rose 18.9% (2.3% y/y) and in the South they rose 7.0% (2.8% y/y) which also was largely due to a rebound in multi-family. In the Northeast, starts fell 24.3% due to a greater decline in single-family.

Another glimmer of good news in the report was that building permits in August rose 1.8% but the gain was all due to a 9.8% increase (31.3% y/y) in multi-family. Single-family permits fell 1.2% (-16.8% y/y) for the fifth consecutive month of decline.

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

Housing Starts (000s, SAAR) August July June August Y/Y 2009 2008 2007
Total 598 541 539 2.2% 554 900 1,342
  Single-Family 438 420 450 -9.1 442 616 1,036
  Multi-Family 160 121 89 55.3 112 284 306
Starts By Region
  Northeast 56 74 60 -21.1 61 120 143
  Midwest 112 92 83 5.7 95 134 206
  South 289 270 287 2.8 281 451 676
  West 141 105 109 11. 117 195 317
Building Permits 569 559 583 -6.7 583 896 1,392
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