Nothing to cheer in new housing starts data 

New data from the U.S. Census Bureau and Department of Housing and Urban Development on the housing industry might appear to be encouraging, in view of all the other negative economic news that's been heard in recent weeks.

According to the Census Bureau and HUD:

"Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 612,000. This is 8.7 percent (±1.5%) above the revised April rate of 563,000 and is 5.2 percent (±2.4%) above the May 2010 estimate of 582,000.

"Single-family authorizations in May were at a rate of 405,000; this is 2.5 percent (±1.1%) above the revised April figure of 395,000. Authorizations of units in buildings with five units or more were at a rate of 190,000 in May.

"Privately-owned housing starts in May were at a seasonally adjusted annual rate of 560,000. 

"This is 3.5 percent (±12.4%)* above the revised April estimate of 541,000, but is 3.4 percent (±8.7%)* below the May 2010 rate of 580,000.

"Single-family housing starts in May were at a rate of 419,000; this is 3.7 percent (±9.5%)* above the revised April figure of 404,000. The May rate for units in buildings with five units or more was 134,000."

But the Hudson Insitute's John Weicher provides the required context to put the latest data in perspective:

"Housing construction has been bouncing up and down from month to month this year, and in May it happened again. Total housing starts were 560,000 at a seasonally adjusted annual rate: above the April rate of 541,000, below the March rate of 593,000, above the February rate of 518,000, below the January rate of 636,000," he said.

"Both single-family homes and apartment buildings have followed this pattern. Obscured by all these fluctuations is the fact that housing construction is down almost 10 percent from last year; it that continues, 2011 will be the worst year for housing since the Census Bureau started keeping statistics in 1959."

Weicher is director of Hudson's Center for Housing and Financial Markets.

 

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Mark Tapscott

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