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 4/17/07 For Mar 2007 | |||||||||||||||||||||||
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Highlights
Housing starts showed unexpected strength in March. Housing starts in March edged up 0.8 percent to a 1.518 million annual rate and were above the consensus forecast for 1.49 million units and compared to the initial February estimate of 1.525 million units. February was revised up to 1.506 million units - a 7.6 percent boost. Housing starts are 23.0 percent below their year-ago rate of 1.972 million and compared to down 29.4 percent in February. In March, single-family starts rose 2.0 percent while multifamily starts decreased 3.8 percent. The March gain in starts should sooth the equity markets. Bond markets are probably surprised negatively but the strong starts figure is likely more than offset by the very good core CPI number today.
Regionally, starts in March were up sharply in the Midwest which posted a monthly 44.5 percent surge. Other regions were down moderately with the South, down 2.7 percent; the Northeast, down 6.1 percent; and the West, down 7.7 percent.
Housing permits rose 0.8 percent to a 1.544 million unit pace from 1.532 million units in February. Single-family permits increased 1.4 percent while multifamily permits slipped 0.7 percent. On a year-on-year basis, permits were down 28.2 percent in March, compared to down 28.6 percent in February.
Today's report is welcome news to equity markets and helps 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 February housing starts jumped 9.0 percent in February to a 1.525 million annual rate. Weather has caused a good deal of volatility in the numbers as February's gain followed a 14.3 percent drop the prior month. But based on inventories still being high and sales not yet on an uptrend, starts are likely to be soft.
Housing starts Consensus Forecast for March 07: 1.490 million-unit rate
Range: 1.436 million to 1.550 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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