US Housing Starts Down Again

The figures for US housing starts showed another drop in October, down 10.6% to a seasonally adjusted, annual rate of 529,000. According to the Washington Post this is “unexpected,” and Business Week called it “surprising.”

I can only assume that these two providers of government-issue press releases must be “shockingly ignorant,” of the fact that the US banks are holding in excess of 22 million foreclosed properties and there are an estimated 7 million more in the pipeline. In fact, I am beginning to despair of ever getting anything other than “spin,” from any so-called news papers ever again. Still I suppose it is not quite as bad as Dubai, where the government issue press releases are claiming anything from 7-30% increases in property prices in Dubai at the same time as UBS forecasts another 30% fall.

A closer inspection of the housing starts:

• Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 552,000. This is 4.0 percent (±1.9%) below the revised September rate of 575,000 and is 24.3 percent (±1.9%) below the October 2008 estimate of 729,000.
• Single-family authorizations in October were at a rate of 451,000; this is 0.2 percent (±1.0%)* below the revised September figure of 452,000.  Authorizations of units in buildings with five units or more were at a rate of 85,000 in October.

HOUSING STARTS

• Privately-owned housing starts in October were at a seasonally adjusted annual rate of 529,000.  This is 10.6 percent (±8.7%) below the revised September estimate of 592,000 and is 30.7 percent (±8.3%) below the October 2008 rate of 763,000.
• Single-family housing starts in October were at a rate of 476,000; this is 6.8 percent (±7.5%)* below the revised September figure of 511,000.  The October rate for units in buildings with five units or more was 48,000.

HOUSING COMPLETIONS

• Privately-owned housing completions in October were at a seasonally adjusted annual rate of 740,000.  This is 1.9 percent (±12.4%) above the revised September estimate of 726,000, but is 29.9 percent (±9.7%) below the October 2008 rate of 1,055,000.
• Single-family housing completions in October were at a rate of 528,000; this is 10.7 percent (±14.5%)* above the revised September figure of 477,000.  The October rate for units in buildings with five units or more was 200,000.

Apartment starts were even worse, reflecting the serious over-building of the last few years, with a seasonally adjusted 53,000 units. Just 5,100 apartments were started in October. This drop in starts would have eaten in to some of the inventory, but with foreclosure filings in excess of  300,000 for the 8th consecutive month, this is going to be a drop in the bucket.

Full report here (PDF Download)