by Calculated Risk on 2/16/2007 09:11:00 AM

The Census Bureau reports on housing Permits, Starts and Completions. Seasonally adjusted permits declined:

Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,568,000. This is 2.8 percent below the revised December rate of 1,613,000 and is 28.6 percent below the January 2006 estimate of 2,195,000.

Starts declined significantly:

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,408,000. This is 14.3 percent below the revised December estimate of 1,643,000 and is 37.8 percent below the January 2006 rate of 2,265,000.

And Completions declined slightly and are just 8% below the level of last January:

Privately-owned housing completions in January were at a seasonally adjusted annual rate of 1,880,000. This is 1.2 percentbelow the revised December estimate of 1,902,000 and is 8.0 percent below the January 2006 rate of 2,044,000.

Click on graph for larger image.
The first graph shows Starts vs. Completions.

Starts are now at the lowest level since Aug 1997. Completions are still just 8% below one year ago, and are at about the same level as early 2005.



This graph shows starts, completions and residential construction employment. (starts are shifted 6 months into the future). Completions and residential construction employment are highly correlated, and Completions lag Starts by about 6 months.

Based on historical correlations, it is reasonable to expect Completions and residential construction employment to follow Starts "off the cliff". This would indicate the loss of 400K to 600K residential construction employment jobs by this Summer.