Starts Show Three Consecutive Months of Improvement
 

The preliminary rate of starts in buildings with five or more apartments for January came in at 100,000 (on a seasonally adjusted  annual basis), representing a 17.6% increase from the number now being reported for December '08. In the same release, however, the December '08 five-plus starts rate was revised downward by 7.6% (and the November rate downward by 2.5%), so January's increase is from a baseline that now appears lower than we originally thought.

Nevertheless, the five-plus starts series shows three consecutive months of improvement, although an annual rate in the neighborhood of 100,000 remains quite low by historical starts. When the 180,000 five-plus starts rate was recorded last November, it marked the first time the  series had dropped below the 200,000 line since 1994. Among the other construction-related statistics in the January release, the rate at which new five-plus permits were issued declined by 26.2% — from 130,000 to 96,000 — another  number that appears quite weak in historical perspective.

Based on this and other signs of weakness, NAHB's multifamily housing forecast calls for the five-plus starts rate  to remain considerably below 100,000 during most of 2010. The forecast shows the five-plus starts rate breaking above 100,000 initially in the first quarter of 2011, then continuing to improve gradually, reaching a rate of 165,000 by the end of that year. [ return to top ]