Single Family Housing Starts Decline Again in July

08-17-2010 • CalculatedRiskBlog.com & ZeroHedge.com

Housing starts of 546k came in well below expectations of 560k. And in keeping with tradition, the US government once again revised the prior period data, to make today's print seem like an improvement: the previous reading of 549k was revised to 537k. As the Census Bureau reported, "Privately-owned housing starts in July were at a seasonally adjusted annual rate of 546,000. This is 1.7 percent (±9.7%)* above the revised June estimate of 537,000, but is 7.0 percent (±7.5%)* below the July 2009 rate of 587,000." Completing the trifecta of economic data, Housing Permits also missed expectations of 580k, coming in at 565k. Far less relevantly, we also find that "privately-owned housing completions in July were at a seasonally adjusted annual rate of 587,000. This is 32.8 percent (±6.8%) below the revised June estimate of 874,000 and is 25.4 percent (±7.3%) below the July 2009 rate of 787,000." In other words, houses really are not being built. The second graph shows total and single unit starts since 1968. This shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for over a year - with a slight up and down over the last several months due to the home buyer tax credit. Here is the Census Bureau report on housing Permits, Starts and Completions. Housing Starts: Privately-owned housing starts in July were at a seasonally adjusted annual rate of 546,000. This is 1.7 percent (±9.7%)* above the 9.7%) revised June estimate of 537,000, but is 7.0 percent (±7.5%)* below the July 2009 rate of 587,000. Single-family housing starts in July were at a rate of 432,000; this is 4.2 percent (±8.7%)* below the revised June figure of 451,000. Building Permits: Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 565,000. This is 3.1 percent (±2.0%) below the revised June rate of 583,000 and is 3.7 percent (±2.2%) below the July 2009 estimate of 587,000. Single-family authorizations in July were at a rate of 416,000; this is 1.2 percent (±1.2%)* below the revised June figure of 421,000. This was below expectations of 565 thousand, and is good news for the housing market longer term (there are too many housing units already), but bad news for the economy and employment short term.