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 11/19/08 For Oct 2008 | |||||||||||||||||||||||
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Highlights
Housing starts in October continued their downward spiral. Starts fell 4.5 percent, following a 3.0 percent drop in September. The October pace of 0.791 million units annualized was down 38.0 percent year-on-year and was above of the consensus projection for 0.780 million units. The drop in starts was led by the multifamily component which declined 6.8 percent while the single-family component decreased 3.3 percent.
By region, the decline in starts was led by a monthly 31.0 percent drop in the Northeast with the Midwest also falling 13.7 percent. The West and South posted gains of 7.5 percent and 1.5 percent, respectively.
Permits also declined in October, dropping 12.0 percent, following a 6.1 percent decline in the prior month. The October 0.708 million unit pace for permits was down 40.1 percent year-on-year.
Today's report shows the housing sector still not stabilizing. This will pull the economy down further in the fourth quarter and even impact the first quarter of 2009.
Housing starts in September continued to plummet, dropping 6.3 percent, following an 8.1 percent fall in August. The September pace of 0.817 million units annualized was down 31.1 percent year-on-year. Many traders hope that starts have hit bottom and will start heading back up, albeit slowly. But housing sales have not picked up enough for any sustained rebound in starts. Both new and existing homes for sale inventories remain very high. Also, the household sector is in less position to buy-there is no reason for homebuilders to be optimistic. Job losses have accelerated and the unemployment rate has spiked. Any given month, starts can show unexpected life, but the fundamentals for housing have worsened, not improved. Any rise in starts should be discounted as not sustainable.
Housing starts Consensus Forecast for October 08: 0.780 million-unit rate
Range: 0.740 million to 0.870 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. |
| 2008 Release Schedule | ||||||||||||||||||||||||||
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