Housing starts measure initial construction of residential units (single-family and multi-family) each month. A rising (falling) trend points to gains (declines) in demand for furniture, home furnishings and appliances. Why Investors Care
| Released on 3/20/07 For Feb 2007 | |||||||||||||||||||||||
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Highlights
Housing starts rebounded in February. February housing starts jumped 9.0 percent to a 1.525 million annual rate and were above the consensus forecast for 1.45 million units and compared to the initial January estimate of 1.408 million units. February's gain followed a 14.3 percent drop the prior month. Home starts are 28.5 percent below their year-ago rate of 2.132 million and compared to being down 38.2 percent in January. For the latest month, single-family starts rose 10.3 percent while multifamily starts advanced 4.1 percent.
Regionally, starts were up for February in the West and South, up 26.4 percent and 18.0 percent, respectively. For the month, starts were down in the Northeast and Midwest, down 29.7 percent and 14.4 percent, respectively.
Housing permits, however, declined 2.5 percent to a 1.532 million unit pace from 1.571 million units in January. In February, single-family permits slipped 3.1 while multifamily permits edged down 0.9 percent. On a year-on-year basis, permits were down 28.6 percent in February compared to 28.4 percent in January.
Today's report is welcome news to equity markets and help sooth concern over a too weak housing market although the slippage in permits is still a concern. Importantly, even the decline in permits is leveling off.
Housing starts fell in January following an artificial boost in December from unseasonably warm weather. January housing starts declined 14.3 percent to a 1.408 million annual rate after a 5.0 percent boost in December. In contrast to December's warm weather, February experienced severe weather in some parts of the country which may cause a temporary drop in starts.
Housing starts Consensus Forecast for February 07: 1.450 million-unit rate
Range: 1.380 million to 1.525 million-unit rate
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Monthly figures are often volatile; housing starts fluctuate more than many indicators. According to the Commerce Department, it takes six months for total housing starts to establish a trend. Consequently, we have depicted total starts relative to a six month moving average. |
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