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Single-Family Housing Starts Stabilize
Reed Construction Data's Chief Economist Analyzes April Housing Starts
Jim Haughey, Reed Construction Data Chief Economist
May 20, 2009
HousingZone
The Reed Construction Data housing forecast is not changed by the U.S. Census Bureau's April report, which showed single-family housing starts at a seasonally adjusted rate of 368,000, 2.8 percent above the revised March number of 358,000. Privately owned housing starts, which includes multi-family, were at a seasonally adjusted annual rate of 458,000. Housings starts hit their peak in January 2006. We still expect total housing starts to recover to 550,000 to 600,000 by the end of this year and 750,000 to 800,000 by the end of next year. This means that residential job site construction activity will drop up to 5-10 percent more into early summer before home builders have both the customers and the credit to expand their work-in-process inventory in anticipation of rising sales.
In turn, this means that residential job site materials consumption will begin rising at the end of the summer leading to resumed growth in materials production soon after. But pricing will remain weak into early next year.
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Why the housing recovery will be long and slow
© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.
