Tuesday, March 20, 2007

Housing Starts Rise, Building Permits Fall

- Housing Starts for February rose to 1525K versus estimates of 1450K and 1399K in January.
- Building Permits for February fell to 1532K versus estimates of 1550K and 1571K in January.
BOTTOM LINE: Housing starts rose more than expected last month, notwithstanding one of the coldest Februarys on record. The gain in housing starts was led by a 26% jump in the West and an 18% increase in the South. Starts in the Northeast dropped 30% and those in the Midwest fell 14%. I expect starts to fall next month. I continue to believe housing sales are stabilizing at relatively high levels and that new home construction will remain muted throughout the year as homebuilders greatly reduce inventories.

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