Global| Jun 16 2009U.S. Housing Starts Recover Modestly
by:Tom Moeller
|in:Economy in Brief
Summary
Though housing starts posted a gain last month, the rise was modest and it suggests that the U.S. housing sector remains under pressure. Total housing starts recovered from their April decline with a 17.2% m/m rise to 532,000 (AR) [...]
Though housing starts posted a gain last month, the rise was modest and it suggests that the U.S. housing sector remains under pressure. Total housing starts recovered from their April decline with a 17.2% m/m rise to 532,000 (AR) units. The May figure was firmer than Consensus expectations for 485,000 starts. However, despite the surprise starts remained down by nearly one-half from one year ago. The best that can be noted is that a further decline has not occurred and starts have been flat during 2009.
Starts of single-family homes posted their third consecutive monthly increase. Regardless, single-family starts remained near the record low for the series which dates back to 1959 and the latest level was down three-quarters since the peak in early-2006. During the last ten years, there has been an 84% correlation between the q/q change in single-family starts and their contribution to quarterly GDP growth.
Starts of multi-family homes rose by nearly two-thirds m/m to 131,000. Nevertheless, the increase failed to make up an April decline and starts of apartments, condominiums & town houses remained down by nearly half from May of last year and starts were off two-thirds from the 2006 peak.
By region, starts of single-family units last month showed broad-based gains. Single-family starts in the Midwest rose 9.4% to their highest level since November (-38.1% y/y). In the South, single-family starts made up the decline of the previous two months with a 10.6% increase off the record low (-42.4% y/y). In the West starts rose for the third straight month (-36.2% y/y). Countering these monthly increases was another decline in the Northeast which was the second in a row (-47.8% y/y).
The latest level of building permits remained near the record low last month. The 4.0% increase did not make up for declines during the prior two months and, overall, permits were down by roughly one-half from last May. Single-family home permits, a leading indicator of starts, however, ticked up 3.6% from March (-42.3% y/y).
The housing starts figures can be found in Haver's USECON database.
| Housing Starts (000s, SAAR) | May | April | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Total | 532 | 454 | -45.2% | 900 | 1,342 | 1,812 |
| Single-Family | 401 | 373 | -40.9 | 616 | 1,036 | 1,474 |
| Multi-Family | 131 | 81 | -55.1 | 285 | 306 | 338 |
| Building Permits | 518 | 498 | -47.0 | 895 | 1,392 | 1,844 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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