Housing starts

RECENT NEWS
Yahoo  Jun 17  Comment 
U.S. housing starts slipped in May as the construction of multi-family housing units dropped, but further gains in building permits signaled a rebound that would support economic growth in the second quarter. Building permits rose 0.7 percent to a...
Clusterstock  Jun 17  Comment 
Housing starts fell 0.3% at a seasonally adjusted annual rate of 1.16 million, a decline that was lower than expected.  Building permits rose 0.7% at a rate of 1.138 million.  Economists had forecast that starts fell 1.9% month-on-month...
newratings.com  Jun 8  Comment 
CANBERA (dpa-AFX) - Canada mortgage and housing Corp. releases Canada housing starts for May at 8:15 am ET Wednesday. The economists were expecting the housing starts to come in at 189,000 units, down from 191,500 units registered a month...
newratings.com  May 31  Comment 
TOKYO (dpa-AFX) - Japan's housing starts expanded at the fastest pace in 10 months in April, the Ministry of Land, Infrastructure, Transport and Tourism said Tuesday. Housing starts grew by more-than-expected 9 percent year-on-year in April,...
Financial Times  May 26  Comment 
Number of houses and apartments beginning construction falls 9% in first quarter
SeekingAlpha  May 17  Comment 
Clusterstock  May 17  Comment 
Housing starts rose more than expected, while building permits disappointed. Housing starts surged by 6.6% in April to 1.172 million.  Economists were expecting housing starts to rise  3.3% to 1.125 million. Meanwhile, building permits...
Wall Street Journal  May 17  Comment 
Yahoo  Apr 25  Comment 
Local governments may be hitting up developers for revenues, Macquarie says.




 
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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