SOLID SINGLE FAMILY GAIN, STILL SUBDUED OVERALL

Housing Starts Thursday November 17, 2011

Housing starts edged 0.3% lower in October to an annual pace of 628k, better than expectations for a larger decline to a rate of 605k. Meanwhile, the prior month was revised lower to an annual pace of 630k from the original estimate of 658k. Housing starts are now 16.5% above their very depressed year ago level. New construction starts, like home sales and mortgage applications, have fluctuated within a relatively narrow range for the past two years with little net change in trend. The outlook is for more of the same going forward with continued uncertainty surrounding the time when the housing recovery and new construction will gain traction. Single family housing starts gained 3.9% to an annual rate of 430k as multifamily starts slumped 8.3% to a rate of 198k. New single family construction has been range bound at a subdued level over the past two years while new construction starts in the multifamily sector have been quite volatile although they are on a modestly improving trend. Housing permit issuance, often used as a proxy for future construction activity, surged 10.9% in October to a 653k annual rate suggesting that new construction may pick-up somewhat in the near term. THOUSANDS OF UNITS
Forecast: Consensus: Actual: 600k 605k* 628k Monthly Oct-11 628 -0.3 430 3.9 198 -8.3 68 102 326 132 653 10.9 434 5.1 219 24.4 Sep-11 630 7.7 414 -2.6 216 35.0 58 93 321 158 589 -5.8 413 -1.2 176 -15.0 Aug-11 585 -4.9 425 -1.2 160 -13.5 57 86 301 141 625 4.0 418 3.7 207 4.5 Jul-11 615 0.0 430 -4.2 185 11.4 85 90 306 134 601 -2.6 403 0.2 198 -7.9 Three Month 614 Six Month 604 Twelve Month 583 Average for 2010 585 5.6 471 6.5 114 2.1 72 97 296 120 603 3.7 448 1.9 155 9.1 2009 554 -38.4 442 -28.2 112 -60.7 61 95 281 117 582 -35.0 440 -22.5 142 -56.6 Five Year 1,039 Ten Year 1,438

Housing Starts (percent change) Single Family (percent change) Multi Family (percent change) Northeast Midwest South West Housing Permits (Percent change) Single-Family (Percent change) Multi-Family (Percent change)

423

427

424

808

1,150

191

177

159

231

288

61 94 316 144 622

65 99 301 139 616

67 94 297 126 594

113 163 523 239 1,063

140 259 688 352 1,481

422

413

411

761

1,113

201

203

183

302

368

Sources: Bureau of the Census, Department of Commerce via Haver Analytics. Data, graph & table courtesy of Insight Economics. *Bloomberg 2011 HousingMatrix, Inc. http://www.HousingMatrix.com All rights reserved. Reproduction and/or distribution are expressly prohibited. Hot Sheet is a registered trademark of HousingMatrix, Inc. Information contained herein is based on sources we believe to be reliable, but accuracy is not guaranteed.