Economic Notes: Homebuilding on Groundhog's Day
3/17/2009
Just like world-famous groundhog Punxsutawney Phil, homebuilders saw some sunshine in February.
In February, national housing starts jumped 22% from January’s all-time record low. Despite the month-on-month increase, starts were still 47% below last year’s level and down almost 75% from January 2006, when homebuilding peaked at an annual rate of 2.6 million units.
The over-the-month rise in homebuilding was concentrated in multifamily starts, which were 80% above January’s anemic level.
Regionally, the Northeast experienced the sharpest monthly increase in housing starts (+88%) due to a 164% jump in multifamily starts.
Building permits, an indicator of future housing construction, also rose nationally between January and February, although the increase was a more modest 3%. Compared to February 2008, the number of permits authorized dropped by 44%.
Homebuilding's winter is far from over.
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