Housing Starts: February 2001

Total housing starts during February of this year were at a seasonally-adjusted annualized rate of 1.647 million units - an extraordinarily high level, given the current state of consumer confidence and future job market expectations.

This was a starts pace barely changed from January's revised rate of 1.653 million units. Starts of single-family homes eased 1.6% over the month, but multi-family starts rose by a solid 8.5%. The annualized pace of starts in multifamily buildings has now improved in three of the past four months.

Starts in the Northeast (+21.0%) and South (+1.5%) were stronger in February than during the first month of the new year. But the number of new housing units on which construction was started fell over the month in both the Midwest (-2.7%) and the West (-8.1%) regions. The February 2001 starts pace was slightly better (+1.3%) than a year earlier in the South, but lower in the West (-9.2%), Northeast (-20.6%), and Midwest (-22.9%) regions. But it's an unusually tough year-ago comparison, since the February 2000 nationwide starts pace was at the exceptionally high level of 1.822 million units.

Fixed rate mortgages carried an average interest rate of 7.05% this February, sharply lower than the 8.33% rate that prevailed during the second month of 2000. Consequently, the housing market has - to this point - been able to sidestep the problems that have plagued most of the other major consumer sectors of the U.S. economy. Some further slowdown is inevitable, however, given the continued vulnerability of consumer confidence, the likelihood of slower job and income gains, and because of the amount of paper wealth that has been dissipated during the severe downturn in equity markets.

The number of building permits issued nationwide fell 3.1% between January and February - a modest decline, but a potential precursor of the trends that we're likely to see in the starts numbers during the next six months or so.

Building Materials Price Inflation - February

Housing Starts - February

Consumer Confidence by Region - February

New Residential Building Permits by Region - February

Recent Trends in New Residential Permits for 2000's Top 25 Metro Areas