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| May Permits and Starts Move Sideways |
| Written by Jonathan Smoke | |
| 06.18.2008 | |
|
Discuss this article on the forums. (0 posts) The Commerce Department reported May’s permits and starts on Tuesday. Total permits in May declined 1.2% to a seasonally adjusted annual rate of 969,000. Single family permits, which represent the bulk of activity, declined 4% to a seasonally adjusted annual rate of 623,000. Single family starts declined 1% to a seasonally adjusted annual rate of 674,000. What does this mean? New construction is moving sideways on a seasonally adjusted basis. The percentage differences for total permits and single family starts were within the margin of error for this survey-based statistic. Only single family permits on a seasonally adjusted basis were conclusively down. In other words, we are moving sideways. No wonder builder sentiment was tied with the December record low (this data series only goes back to 1985) in June. What is true is that the seasonal pattern hasn’t materialized as normal. Non-seasonally adjusted starts went up in May, but not like normal. Expect more of the same—conditions not deteriorating but not improving either—until inventories of new homes are whittled down further. The national numbers will likely hide the fact that a few markets will recover sooner. When we see improvements in all housing stats we will be well past the bottom. 
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