Thursday, May 16, 2013

Housing Starts

Housing Starts
Released On 5/16/2013 8:30:00 AM For Apr, 2013
PriorConsensusConsensus RangeActual
Starts - Level - SAAR1.036 M0.969 M0.930 M to 1.000 M0.853 M
Permits - Level - SAAR0.902 M0.945 M0.916 M to 0.980 M1.017 M
For April, housing starts notably disappointed but housing permits were unexpectedly optimistic. In April, housing starts plunged a monthly 16.5 percent after rising 5.4 percent in March. The April starts annualized level of 0.853 million units fell short of analysts' forecast for 0.969 million units and was up 13.1 percent on a year-ago basis.

The decrease in starts was led by a monthly 38.9 percent drop in the multifamily component after a 25.6 percent gain in March. The single-family component slipped 2.1 percent in April after declining 4.4 percent the month before.

By region, the decrease in April starts was broad-based. The Midwest declined 16.4 percent; the South (the largest region), down 8.0 percent; and the Northeast, down 1.3 percent. The West gained 7.4 percent.

Permits were unexpectedly strong-suggesting forward momentum for the housing sector. Permits jumped 14.3 percent after a 6.5 percent decrease in March. April's annualized pace of 1.017 million units was up 35.8 percent on a year-ago basis. Market expectations were for 0.945 million units for April permits.

Overall, housing may still be coming out of winter month volatility. But permits point to gradual improvement for the housing sector.
Market Consensus before announcement
Housing starts were unexpectedly strong in March but it was all in the multifamily family component. And overall permits slipped, indicating that the housing recovery may be softening despite the strong headline number for starts. In March, housing starts jumped 7.0 percent after a 7.3 percent gain the month before. The March starts annualized level of 1.036 million was up 46.7 percent on a year-ago basis. The increase in starts was led by a monthly 31.1 percent increase in the multifamily component after an 11.2 percent boost in February. The single-family component decreased 4.8 percent after rising 5.5 percent in February. Permits fell back, declining 3.9 percent to an annual pace of 0.902 million units.
A housing start is registered at the start of construction of a new building intended primarily as a residential building. The start of construction is defined as the beginning of excavation of the foundation for the building.  Why Investors Care
Monthly figures are often volatile; housing starts fluctuate more than many indicators. It takes several months for total housing starts to establish a trend. Consequently, we have depicted total starts relative to a five month moving average.
Data Source: Haver Analytics