"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Tuesday, April 19, 2011

Housing Starts

Housing starts are big economic news.  They represent actual new construction beginning for residential units.  The markets like this a lot, because of the overall impact this can mean to the economy.  New homes hopefully mean new home sales, which means the single largest expense that the average consumer takes on.  And that expense is the gift that keeps on giving to the economy, because it becomes an ongoing income stream for banks and mortgage companies (or a source of large cash injections if the mortgages are packaged and sold as CMOs).  They also provide a trickle-down effect - new homes require new carpet or tile or hardwood laminates, new appliances, paint or wallpaper, furniture, and so forth.
February wasn't that good a month for housing starts (although, really, what would you expect?), with only 479,000 new homes beginning construction and 517,000 new construction permits issued.  The Econoday-surveyed analysts are expecting better things for March, calling for 525,000 new starts.
To find out how we actually did for March, we turn to a joint press release from the US Census Bureau and the US Department of Housing and Urban Development.  The release indicates that new housing starts came in at a seasonally adjusted 549,000, substantially better than February, but still below the March 2010 results.  422,000 of those starts were single-family homes.  594,000 new building permits were issued (405k of which were for single-family homes), and 509,000 privately-owned homes were completed (374k of which were single-family units).

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