Starts Data Goes Up...and Down
The Census Bureau's preliminary June starts rate for  buildings with five or more apartments came in at 281,000 (on a seasonally adjusted annual basis). Although that currently shows up as a 13% increase from May, this is somewhat misleading. Starts have been relatively weak throughout the first half of 2007, so the June starts rate is actually down 8% year-over-year. Moreover, the Census Bureau revised the May starts rate downward by 8%. Were you to focus on the preliminary releases without following the revisions, you'd miss the five-plus starts rate of 249,000 currently posted for May. That's a very weak number, and marks only the third time since 2003 that the rate has dipped below 250,000.

Source: U.S. Census Bureau; NAHB Economics Group

Nevertheless, if it withstands the revisions, the June starts rate of 281,000 would represent a relatively healthy number by recent standards. The other five-plus construction statistics are signaling weakness, however. For example, the rate at which new permits were issued dropped 15% from the strong number posted in May. Meanwhile, the near-historic high backlog of unused five-plus permits and near-historic low rate of five-plus completions that prevailed in May were little changed in June. Based on this, NAHB's forecast calls for the five-plus starts rates to remain, on average, below 250,000 until the end of 2008. [ return to top ]