Housing starts fell 4.8% to 708,000 in May (consensus was 722,000). Starts for single family properties increased 3.2% m/o/m to 516,000 in May.

Note this returns us back to Spring 2010 levels of construction.

Despite some happy talk, you should not mistake this modest stabilization for a turnaround in the housing market.

Prior to the credit bubble, single family starts were trending at about 1.2 million units. During the mania, we saw single family starts near 1.8 million per year.

I am compelled to point out that Starts compete with distressed sales and foreclosures. While we are seeing improvement, much of this comes formt ghe Foreclosure abatement of the past year. That has ended, and Foreclosures (as measured by RealtyTrak) are once again rising.


Foreclosure Machinery Creaks Back to Life (June 14th, 2012)

Category: Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Housing Starts Fall (but look beneath the headlines)”

  1. wally says:

    “Starts compete with distressed sales and foreclosures”
    True, but only to a limited degree. After all these years of foreclosures and distressed sales we are down to the dregs. Much of that will turn in to permanent losses for banks; it is a different product than a new house. These are the equivalent of picked-over out-of-season merchandise that a smart retailer would dump.

  2. BennyProfane says:

    Glad to see that they’re building more houses. Just what this country needs!

  3. VennData says:

    March and April were revised up, multi-family is volatile, May will be revised
    Single family starts were up, we’re not going to see the bubble-era numbers for a generation.
    Building permits were up sharply

  4. Chief Tomahawk says:

    Well…… Been watching CNBC for 45 minutes thus far… and despite them showing Jamie Dimon’s House Financial Service Committee appearance on the screen, not a single mention of Charlie Gasparino’s Pension piece implicating JP Morgan… in fact CNBC just pointed out JPMorgan’s stock is up 2% today!

  5. [...] to help boost the economy — or so experts keep telling us. And with continuing bad news on growth, housing, labor markets and the economic stress of Europe in the background, the chances of the Fed acting [...]

  6. On the bright side, starts were up 28.5% YoY. It’s all about perspective

  7. kek says:

    Maricopa County AZ showing avg. price per square foot increasing 8.8% from February to April of this year. There are only 8,800 active listings, with only a 21 day supply of single family homes for sale under $250,000. Investors have been crowding out “ordinary buyers” because of the preference of the seller to an all cash offer, vs. an offer comprised of some form of financing. New home construction in Maricopa County has been very strong as a result of these factors. It has become the option of “ordinary buyers”.

    Those employed in the new home construction market in Maricopa County are having a good year.

  8. 4whatitsworth says:

    Gutsy call! I think I am still in the trading range camp to many issues still looming (government confusion, shortage of skilled labor, European melt down, housing) Also, 30 % chance we dip into recession and some risk of a middle east event.

    That said I can’t say I would bet against you and I am cautiously in for now.

  9. louis says:

    There is no perspective about this, building more houses is insane behavior.


  10. nickthap says:

    NPR is driving me nuts with this “housing starts are up” story. Kai Rysdall at Marketplace is the worst offender. But Morning Edition is on there with flaks from NAR. It’s extremely disappointing.

  11. David in D says:

    I generally agree with BR, but I think he is too bearish on housing. I just sold and purchased a home in the metro Denver area and might I say the market here is sizzling hot! It is difficult to find good properties and easy to sell into the market strength. I know that real estate is local, but the housing market is definitely rebounding in desirable areas. Perhaps not in certain areas of the country but definitely in places like Denver.