Housing Starts Strong Again

Housing starts were stronger than expected last month. Total starts rose slightly from an upwardly revised December level. Starts had been expected to decline slightly.

Single family starts rose 2.1% m/m, nearly to the record high level set in 1978.

Multi-family starts fell for the first month in three. The y/y comparison was to a strong January last year.

Building permits fell and gave back roughly half of a very strong December gain that was upwardly revised. The decline was entirely due to a drop in permits for five or more unit structures. Single family permits rose modestly m/m to a record level.

A strong seasonal factor lifted the adjusted level of housing starts last month by 29% versus a 24% add in December and a 10% addition in November.

The National Association of Home Builders Housing Market Index fell in February, down for the second month. Despite the declines, the index remained at the firmest level since 1999.

Surveys of market conditions for current sales were stable. Expected sales in six months fell to the lowest level since August.

Traffic of prospective buyers fell sharply. This survey was taken prior to the snowstorm in the East.

For a description of the housing market index from the National Association of Home Builders, visit the NAHB website.

Chain store sales fell a slight 0.1% last week according to the BTM-UBSW survey. The decline followed flat sales the week prior and a sharp decline late in January.

February sales so far are down 0.3% from the January average. The year-to-year comparison went negative due to a sales surge during mid-February last year.

The y/y gain in Redbook Same Store sales remained positive despite a similar sales surge last year.

During the last ten years there has been a 56% correlation between the year-to-year percent change in monthly chain store sales and the change in nonauto retail sales less gasoline.