It’s not worth anyone’s time to pore over the monthly data on housing starts because the numbers fluctuate a lot, and you can look stupid extrapolating from what turns out to be just a blip.
On the other hand, it’s the best evidence we have, so here’s a quick read on the data that came out today from the Census Bureau (just one day after the NAHB released its survey on builder confidence).
The good news: Building permits were up a seasonally adjusted 3% from April, though down almost 22% from a year earlier.
The bad news: The number of homes on which construction began in May was down 2% from April and down 24% from May ‘06.
U.S. economist Patrick Newport of Global Insight
points out that the increase in permits was entirely because of permits for multi-family dwellings. Single-family permits kept falling in May. Here’s what he had to say about the outlook:
In our latest forecast, we projected that housing starts would turn around late this year, and home sales early next. These latest developments may push back the recovery a few more months. The housing market has been in recession since September 2005, the month both existing home sales and family permits peaked.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.