Economist's Commentary: May 16, 2008

Quick Take on the Economy: May 16, 2008

By George Ratiu, Research Economist

Research Economist George Ratiu

Housing starts jumped 8.2 percent in April to a seasonally adjusted annual rate of 1.032 million. Starts are down by 30.6 percent from a year ago.
The increase is driven by multi-family housing, which recorded a 40.5 percent increase from March, and a 28.9 percent increase from April 2007.
Single-family construction continued its slide, down 1.7 percent from last month.
Building permits - a good precursor of future starts - rose by 4.9 percent in April, to a 978,000 annual rate.
Regionally, residential housing starts dropped 12.7 percent in the Northeast. However, housing starts increased 24.4 percent in the Midwest, 3.6 percent in the South and 18.5 percent in the West.

April's increase in housing starts was prompted by multi-family construction, a traditionally volatile sector.
The current inventory of single-family homes for sale continues to be high, as noted by the decline in single-family starts. Further corrections are likely in the months ahead.

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