Home Construction Appears To Be Stabilizing

New York, NY, July 14, 2009--Action Economics said it expects residential construction to decline at a 33% rate in the second quarter GDP report, which would be less than the peak-rate of 39% in the first quarter.

In its Housing Report, the group said housing starts are expected to slide to a 520,000 unit pace in June from 532,000 in May, a 2.3% decrease.
    
It said total starts have been distorted by persistent weakness in multi-family starts that has come amid the credit crunch, while single-family starts have made some headway this year.

The report said the U.S. NAHB housing market index slipped to 15 in June from 16 in May but was still well off the record low of 8 seen in January and is broadly consistent with stabilization in housing.

The group said that starts bounced by 17.2% to a 532,000 pace in May from the all-time low of 454,000 in April, as this forward-looking measure for housing construction seeks to establish a new bottom. It said the recent permit pattern is consistent with starts in the 515,000 to 520,000 range over the coming months.

The geographic mix for May starts showed a sizable 29% bounce in the West that left an out-performance in this region, alongside a 17% rise in the South, 2.0% gain in the Northeast, and 6% drop in the Midwest.