Housing Starts in May Fall 32% from Last Year According to Census Bureau

Article Submitted by: Sam Cass
Real Estate


Housing permits and starts are all down significantly from last year.

 

Submitted: Jun 18, 2008    Views: 80    Comments: 2    Likes: 2   


HousingStarts The US Census Bureau released their housing data for May and it showed continued deceleration in residential home construction:

"Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 969,000.  This is 1.3 percent (±1.2%) below the revised April rate of 982,000 and is 36.3 percent (±1.3%) below the revised May 2007 estimate
of 1,522,000.

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 975,000. This is 3.3 percent (±10.7%)* below the revised April estimate of 1,008,000 and is 32.1 percent (±5.1%) below the revised May 2007 rate of 1,436,000."

As the chart on the right shows, housing starts have fallen significantly from their recent peak in 2005.  Nonetheless, the drop-off is consistent with other housing slowdowns and doesn't appear catastrophic - yet.  I calculated the 2008 data by avering the first 5 months of the year and then multiplying by 12.  A further slowdown in future months could bring the level to an historic low. 

 





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Comments Received:

soczie
soczie

This is all healthy long term because the supply needs to dry up in order for market to stabilize across the country. However, under any circumstance, I think that we are still at least 2 years away from a bottom.

Posted: Jun 18, 2008

Sam Cass
Sam_Cass

@soczie - I agree that supply needs to dry up but the hit on the economy will be severe. Housing created a lot of jobs.

We'll see if starts keep dropping. We're close to a 40 year bottom so time will tell if you go under.

Posted: Jun 18, 2008



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