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Single Family Home Starts Down 9.9 Percent

From Reuters:

Home building permits near 3.5-year high

By Lucia Mutikani
March 20, 2012

WASHINGTON (Reuters) – Permits for homebuilding neared a 3.5-year high in February, suggesting a budding recovery in the housing market was still on track even though groundbreaking activity slipped.

New building permits surged 5.1 percent to a seasonally adjusted annual rate of 717,000 units last month, the highest since October 2008, the Commerce Department said on Tuesday.

The jump in permits, which exceeded economists’ expectations for an advance to a 690,000-unit pace, reinforced views the housing market was improving and that home building would add to economic growth this year for the first time since 2005

So the Reuters economists were fooled and this was unexpected?

Financial markets largely ignored the data.

While green shoots are emerging in the housing market, an oversupply of unsold homes is depressing prices and starts are still less than a third of the 2.27 million rate peak reached in January 2006.

In February, housing starts slipped 1.1 percent to a rate of 698,000 units, but there was more new construction activity in January than previously reported. Moreover, starts were up 34.7 percent from February last year, the biggest year-on-year rise since April 2010.

Construction of single-family homes – the lion’s share of the market — dropped 9.9 percent last month, but groundbreaking for multi-family housing projects soared 21.1 percent.

Over the past year, starts on single-family homes have risen 17.8 percent, while multi-family starts have nearly doubled as demand for rental properties has risen, with many Americans moving away from homeownership

Yippee! Thank goodness Reuters always finds a way to emphasize the good news and bury the bad.

Permits last month were boosted by a 4.9 percent rise in approvals for single-family home projects to their highest level since April 2010. It was the fifth straight month that building permits for single-family homes had increased.

Permits usually lead home construction by about a month, meaning that starts will likely reverse their slide in March

Can you spot the flaw in Reuters’ logic here?

If permits for single family homes have been up for the last five months, and they lead construction starts by a month, why did single family starts go down nearly 10 percent last month?

This article was posted by Steve on Wednesday, March 21st, 2012. Comments are currently closed.

One Response to “Single Family Home Starts Down 9.9 Percent”

  1. tranquil.night says:

    “Can you spot the flaw in Reuters’ logic here?

    If permits for single family homes have been up for the last five months, and they lead construction starts by a month, why did single family starts go down nearly 10 percent last month?”

    Logic? Wutz dat?

    The truth is what the consensus of experts tells us. *sagenod*


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