Thursday, July 17, 2008

Single Family Housing Starts: Lowest Since 1991

by Calculated Risk on 7/17/2008 08:35:00 AM

The key number in the release was that single-family starts were at 647 thousand in June; the lowest level since 1991. Single-family permits were at 613 thousand in June, suggesting starts will fall even further next month.

Multi-family starts is volatile month-to-month, so the headline number for starts increased.

Also employment (in residential construction) tends to follow completions. Completions will follow starts lower over the next few months. Single-family completions are still at 847 thousand - well above the level of single-family starts.

Total Housing Starts and Single Family Housing Starts Click on graph for larger image in new window.

The graph shows total housing starts vs. single family housing starts.

Single family starts are at the lowest level since 1991.

Note that the current recession on the graph is not official.

Here is the Census Bureau reports on housing Permits, Starts and Completions.

Building permits decreased:

Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,091,000. This is 11.6 percent above the revised May rate of 978,000, but is 23.9 percent below the revised June 2007 estimate of 1,433,000.

Single-family authorizations in June were at a rate of 613,000; this is 3.5 percent below the May figure of 635,000.
The declines in single family permits suggest further declines in starts next month.

On housing starts:
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,066,000. This is 9.1 percent above the revised May estimate of 977,000, but is 26.9 percent below the revised June 2007 rate of1,458,000.

Single-family housing starts in June were at a rate of 647,000; this is 5.3 percent below the May figure of 683,000.
And on completions:
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,167,000. This is 1.2 percent above the revised May estimate of 1,153,000, but is 21.7 percent below the revised June 2007 rate of 1,491,000.

Single-family housing completions in June were at a rate of 859,000; this is 2.9 percent below the May figure of 885,000.
Notice that single-family completions are still significantly higher than single-family starts. More on starts and completions later.