Yet another set of odd and misleading coverage on Housing Starts.
BUILDING PERMITS: Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 563,000. This is 8.7% (±3.0%) above (revised) May rate, but is 52.0% (±3.6%) below the June 2008.
HOUSING STARTS: Privately-owned housing starts in June were at a seasonally adjusted annual rate of 582,000. This is 3.6% (±11.3%)* above the revised May estimate but is 46.0% (±4.3%) below the June 2008.
What can we tell from this data?
Nothing about monthly change in Starts (data points less than the margin of error are not statistically significant); We can say that permits were up month to month, although how much of that is seasonal is hard to decipher.
The year-over-year data is much clearer: New Starts down 46%, Permits down 52%.
Not exactly green shoot materials here — but given the enormous inventory overhang, less new building is better. And since year-over-year compares the same month, seasonality is not a factor.
Incidentally, much of the media reportage on this was simply innumerate — the numerical equivalent of illiteracy. Not just a little wrong, but totally, embarrassingly incorrect.
WSJ: “Housing starts increased 3.6% to a seasonally adjusted 582,000 annual rate compared to the prior month, the Commerce Department said Friday.”
Bloomberg: Housing starts in the U.S. unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, signaling the market is stabilizing. The 3.6 percent increase brought starts to an annual rate of 582,000.
Marketwatch: Housing starts rose 3.6% to a seasonally adjusted annual rate of 582,000, the highest figure November.
Reuters: New housing starts and permits jumped more than expected in June, propelled by a rise in single-family homes, a government report showed on Friday. Housing starts climbed 3.6 percent to seasonally adjusted annual rate of 582,000 units, from May’s upwardly revised 562,000 units, the Commerce Department said.
No, that is not what they said at all — plus 3.6% with a margin of error of 11.3% = YOU DON”T KNOW.
I know, this is a pet peeve of mine — but still, it makes you wonder if these people can count to 21 unless they are naked.
Note the number of monthly improvements which did not prevent big annual drops over the past 3 years:
graph courtesy of Barron’s Econoday
NEW RESIDENTIAL CONSTRUCTION IN JUNE 2009
Census and HUD, JULY 17, 2009