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

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

Housing Starts 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. 

 

Sam Cass
Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

Comments

  • Sam Cass

    June 19, 2008

    @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.

  • soczie

    June 19, 2008

    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.

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