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 11/20/07 For Oct 2007 | |||||||||||||||||||||||
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Highlights
Housing starts in October made a partial rebound but permits continued to spiral downward. Housing starts in October rose 3.0 percent, following a revised 11.4 percent drop in September. The 1.229 million unit annual rate came in above the market projection for 1.160 million units and compared to the initial September estimate of 1.191 million units. However, overall permits fell 6.6 percent, following a 4.6 percent decline the month before. The decline in permits more likely represents the true status of housing in October.
Within starts, strength was led by the multifamily component. The multi-family component rebounded 44.4 percent, following a 35.9 percent drop in September. The single-family component declined 7.3 percent, following a 2.1 percent decrease the month before.
On a year-on-year basis, overall starts were down 16.4 percent in October, compared to down 30.7 percent in September. Starts did not really improve that much for the latest month - October 2006 dipped below trend at that time.
Regionally, starts in October were led by a 21.1 percent spike in the Midwest with gains also seen in the Northeast and West, up 8.5 percent and up 5.8 percent, respectively.
Within housing permits, single-family permits declined 8.0 percent while multifamily permits slipped 3.4 percent. On a year-on-year basis, overall permits were down 24.5 percent in October, compared to down 23.8 percent in September.
The October housing starts report shows housing still quite weak. Some of the strength in October was nothing more than coming off an extraordinarily weak September. Permits continue to point to further declines in housing. Recovery is looking further and further out in 2008. Although the data were mixed, markets should see permits as the series to react to. Bonds should like today's numbers while equities are likely to be uncertain.
Housing starts fell a sharp 10.2 in September percent to an annual rate of 1.191 million - the lowest rate since 1993. Permits are also at their lowest since 1993, down 7.3 percent in the month to a 1.226 million rate. The data reflect the swollen supply of homes on the market as sales have slowed due to both a softer economy and tighter lending standards.
Housing starts Consensus Forecast for October 07: 1.160 million-unit rate
Range: 1.000 million to 1.230 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. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
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