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Economy in Brief

U.S. Housing Starts Remain Under Intense Pressure
by Tom Moeller  August 16, 2011

Slack demand and earlier overbuilding continue to pressure new home construction. Housing starts fell 1.5% last month to 604,000 (AR) after a downwardly revised 10.8% June gain, initially reported as 14.6%. Expectations had been for 600,000. Starts have moved sideways since the initial lift off the recession floor in 2009. As a result, the level of new building activity remains nearly three-quarters below the 2006 high.

Starts of multi-family units recently have somewhat countered that trend. The 7.8% gain last month to 179,000 followed a 21.2% June increase. Multi-family starts have more-than-doubled the recession low. Starts of 2-to-4 building units generally have moved sideways. However, starts of larger buildings with 5 or more units rose for the third straight month during July and have tripled since the recession low.

Starts of single-family units fell 4.9% last month (-0.9% y/y) and gave back most of the June gain. The lethargy of the y/y rise is evidenced by a 20% decline since last year's peak that was temporarily lifted by the first-time home-buyers tax credit. Since the 2006 peak, single-family starts have fallen by more than three-quarters

Building permits fell 3.2% (+3.8% y/y) and more-than-reversed the June uptick. Single-family permits nudged up 0.5% (-1.2% y/y) but multi-family permits fell 10.2% (16.3% y/y).

The housing starts figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

Housing Starts (000s, SAAR) Jul Jun May Y/Y % 2010 2009 2008
Total 604 613 553 9.8 585 554 900
 Single-Family 425 447 416 -0.9 471 442 616
 Multi-Family 179 166 137 47.0 114 112 284
Starts By Region
 Northeast 97 72 56 27.6 72 61 120
 Midwest 76 122 99 -17.4 98 95 134
 South 303 287 264 10.2 296 281 451
 West 128 132 134 19.6 120 117 195
Building Permits 597 617 609 3.8 603 582 896
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