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 7/18/07 For Jun 2007 | |||||||||||||||||||||||
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Highlights
Housing starts in June improved slightly but remain soft. Housing starts in June rebounded 2.3 percent, following a revised 3.4 percent decline in May. June's 1.467 million annual rate came in marginally above the consensus forecast for 1.45 million units and compared to the initial May estimate of 1.474 million units. In June, single-family starts edged down 0.2 percent while multifamily starts jumped 12.5 percent. On a year-on-year basis, overall starts are down 19.4 percent in June, compared to down 26.2 percent in May.
Regionally, starts in April were strongest in the West with a 9.0 percent rebound after dropping 17.2 percent in May. Starts rose 2.4 percent in the South in June while the Midwest and Northeast saw declines of 3.7 percent and 2.4 percent, respectively.
Housing permits, however, fell 7.5 percent in June, following a 4.3 percent rise the month before. Housing permits were at a 1.406 million unit annual pace, compared to 1.520 in May. Single-family permits slid 4.1 percent while multifamily permits dropped 15.3 percent. On a year-on-year basis, overall permits were down 25.2 percent in June, down from down 20.8 percent in May.
The June starts report shows housing as still weak - especially taking into account the notable drop in permits and that starts' strength was in the volatile multifamily component. Today's report is mostly a non-event given the generally favorable CPI report and markets waiting on Fed Chairman Ben Bernanke's Congressional testimony.
Housing starts in May slipped 2.1 percent, following a revised 1.0 percent increase in April. Numerous housing indicators point toward continued weakness in starts. Months' supply both for existing and new homes for sale remain high. The pending home sales index fell 3.5 percent in May, following a 3.4 percent drop in April, leaving a year-on-year decline of 13.3 percent for May. For now, homebuilders have little incentive to boost starts.
Housing starts Consensus Forecast for June 07: 1.45 million-unit rate Range: 1.42 million to 1.49 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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