The good news is that Housing Starts and Building Permits each increased for the month of May.
And in a statistical shocker, the monthly gains for May 2009 were (surprisingly) greater than the margin of error for both Starts at 17.2% (±14.4%) and Permits at 4.0% (±1.7%) over April.
The stunning news was the 45.2% (±5.8%) collapse below the May 2008 rate. That is simply an unbelievable freefall.
Of course, Housing Starts did not “soar” as Bloomberg claimed; you soar high int he sky, and a move from ankle to knee level does not qualify. This was not, as the WSJ asserted, a “Surge in Home Construction.” Rather, it was a bounce off of record lows, as was correctly observed by the WSJ’s sister publication, Marketwatch:
“The surprising increase was led by a 62% gain in new construction of multifamily dwellings, the government estimated. Starts of single-family homes rose 7.5% to a 401,000 rate, the highest since November.
The government cautions that its monthly housing data are volatile and subject to large sampling and other statistical errors, with large revisions common. In the past six months, the average monthly change in starts has been 14%.But in most months, the government can’t be sure whether starts increased or decreased. In May, for instance, the standard error for starts was plus or minus 14.4%.
Good stuff, Rex. Your recognition to context and accuracy is appreciated!
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Chart via Barron’s Econoday
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Sources:
NEW RESIDENTIAL CONSTRUCTION IN MAY 2009
The U.S. Census Bureau and the Department of Housing and Urban
JUNE 16, 2009 AT 8:30 A.M. EDT
http://www.census.gov/const/newresconst.pdf
U.S. housing starts bounce back strongly from record low
Rex Nutting
MarketWatch, JUNE 16, 2009
http://www.marketwatch.com/story/housing-starts-bounce-high-off-record-low
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