Housing starts

RECENT NEWS
SeekingAlpha  Jul 17  Comment 
By James Picerno: Housing starts were surprisingly weak in June, the Census Bureau reports. The consensus forecast was looking for a modest gain to a 1.026 million annualized rate. Instead, the actual number dipped to 893,000-the lowest since...
Motley Fool  Jul 17  Comment 
Housing permits and completions take dips, too.
SeekingAlpha  Jul 17  Comment 
By Marc Chandler: US housing starts in June collapsed. The 9.3% decline contrasts with expectations for a 1.9% increase, according to a Bloomberg survey. Adding insult to injury the May series was revised down to show a decline of 7.3% rather than...
Wall Street Journal  Jul 17  Comment 
U.S. home construction tumbled in June due to a stretch of wet weather in the South, a decline that analysts said was likely a temporary departure from a trend of recovery in the housing market.
Reuters  Jul 17  Comment 
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market recovery was gaining traction.
newratings.com  Jul 17  Comment 
WASHINGTON (dpa-AFX) - New residential construction in the U.S. unexpectedly showed a steep drop in the month of June, the Commerce Department revealed in a report on Thursday, with housing starts falling to a nine-month low. The Commerce...
MarketWatch  Jul 17  Comment 
Construction on new U.S. homes tumbled in June to the slowest pace in nine months, missing analysts’ estimates and adding to worries about the housing market’s stalled recovery.
New York Times  Jul 17  Comment 
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, but a separate report showed a decline in housing starts last month.
StreetInsider.com  Jul 17  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Economic+Data/June+Housing+Starts+893K+vs+1020k+Expected%2C+Up+-9.3%25+MoM+vs+1.9%25+Expected/9668170.html for the full story.




 
TOP CONTRIBUTORS

Housing starts is a closely-watched indicator of the health of the home construction industry. Homebuilding is a major component of the overall economy due to all its size and its linkages with finance, basic materials, home furnishings and appliances, employment and overall growth.

Source

The Census Bureau, together with the Department of Housing and Urban Development (HUD) jointly report on new residential construction each month. The report has three components: Building permits, housing starts and housing completions. See [[1]]

Image:starts.png


Discussion

  • Housing starts is a measure of the number of privately-owned new housing units that began construction in the reporting month. It is usually reported at the seasonally adjusted annual rate (SAAR). The most recent peak in starts was 1.8 million units in November 2006. In February of 2008 the SAAR was 1,065,000. (These figures include all housing types except mobile homes/manufactured housing.)
  • Before a housing unit is built a building permit is issued. In a sense, building permits are a leading indicator of how many starts there will be in a month or two. In February 2008 the SAAR for permitted units was 978,000, some 7.8% below the revised January rate.
  • Housing completions tells us how many of the homes that were permitted and started have been finished. This measure doesn’t get much attention by the media or most investors. As of February 2008 completions were at the SAAR of 1,208,000, which is about 8.8% below January and 26% below the rate one year earlier.


Note

In general, and for a variety of reasons, starts are usually about 2.5% less than permits and completions are about 4.0% less than starts. The greatest variability is in the multifamily sector, where starts have been 22.5% less than permits (mostly due to reclassification to single-family) and completions have been 7.5% less than starts.

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