Starts Rise, but Remain Much Lower than Last Year
While the single family numbers showed continued weakness, starts in buildings with five or more apartments increased substantially in February, to a quite healthy (seasonally adjusted annual) rate of  331,000. At the same time, the Census Bureau made an usually large upward revision  (17%, from 247,000 to  289,000) to its five-plus starts estimate for January. After the revision, the monthly series shows five-plus starts increasing 14% in February on top of a 39% increase in January. As a result, total five-plus starts over the first two months of the year are about 19% higher in 2008 than they were in 2007.  

Before becoming too euphoric, however, it would be wise to remember that the upward trend in January and February is based off the near-historic low point in December. Moreover, the rate at which new five-plus permits were issued in February was down 12% from January, and 20% year over year. Weakness in the market for owner-occupied housing has a tendency to benefit the multifamily rental sector, but the multifamily starts number also includes multifamily condominiums. Moreover, general problems in credit markets (such as we're now experiencing), have historically had a tendency to adversely impact all categories of residential construction. [ return to top ]