Multifamily Starts Are Up, Modest Improvement in 2009
Following last month's decline, starts in buildings with five or more apartments surged to a (seasonally adjusted annual) rate of 326,000 in April. This is up more than 40% from March, and about 29% year over year. It's advisable to keep the volatility of the series in mind when interpreting month-to-month changes, however, as well as the tendency for preliminary starts figures to be subsequently revised. In fact, the Census Bureau revised the seasonally adjusted monthly starts series all the way back to January of 2006 this month, something that typically happens after a full calendar year of data comes in and new seasonal factors can be computed. Over the past year, the five-plus starts series has been following a roller-coaster pattern. 

One-month peaks that are clearly too high to sustain — such as last month's 326,000 or the 356,000 posted in February — have been interspersed with one-month troughs that are clearly too low to sustain — such as last month's 232,000 or the 211,000 posted in December. Based on a larger sample than starts, permit activity often shows somewhat less volatility. The rate at which new five-plus permits were issued in April remained weak — less than 300,000 for the third month in a row. In total, NAHB's forecast calls for 263,000 five-plus starts in 2008, followed by a modest improvement to 271,000 in 2009. [ return to top ]