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 2/20/08 For Jan 2008 | |||||||||||||||||||||||
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Highlights
Housing starts popped higher in January but remain badly depressed, up 0.8 percent for a 1.012 million annual rate that is a little lower than expected and down 28 percent from this time last year. Permits during the winter months may give a better picture of the housing market given construction delays tied to weather -- and permits weakened, down 3.0 percent for a 33 percent year-on-year decline.
Single-family starts fell 5.2 percent in the month to a 743,000 unit rate, offsetting a 22 percent jump in multi-family starts to a 269,000 rate. Regional data showed weakness in permits everywhere except the Midwest where starts also gained. Starts also rose in the Northeast.
Despite gains here and there, the overall signal from this report is negative, indicating that bloated levels of supply are keeping builders on the defensive which was evident yesterday in another very soft housing market report from the National Association of Home Builders. Existing home sales for January will be released Monday.
Housing starts in December fell sharply, dropping 14.2 percent, following a revised 7.9 percent decline in November. Within starts, weakness in the latest month was led by multifamily units. Single-family starts in December declined 2.9 percent after a 6.9 percent fall in November while multifamily starts posted a sharp 40.3 percent drop after a 10.1 percent decline in November. The latest pending home sales numbers and unsold supply indicate that builders have little reason to boost starts yet and are more likely to still be pulling back from December's 1.06 million unit annualized pace.
Housing starts Consensus Forecast for January 08: 1.01 million-unit rate
Range: 0.95 million to 1.06 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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