Housing Starts Up Again

New housing construction starts rose modestly in August, continuing a generally upward trend since last spring and providing further hope that the housing market and economy are stabilizing after the worst economic downturn since the Great Depression.

Construction starts on privately built residential units rose 1.5 percent in August, buoyed by a big increase in the battered apartment and multiunit condominium sector. Construction starts of residential buildings of five units or more were up 35 percent for the month, offsetting a small decline in single family home starts.

Single family home construction starts were down 3 percent, posting their first monthly decline in seven months. The data was provided in the monthly report on new housing construction from the U.S. Census Bureau and Department of Housing and Urban Development (HUD).

Total housing starts were at a seasonally adjusted total of 598,000, up from 589,000 in July, but down about one-third from the August 2008 level of 857,000. The August 2009 figures included 479,000 single-family and 115,000 multifamily units.

Upward trend since January

Housing starts have been generally increasing since the beginning of the year, when they bottomed out at 488,000 units in January. Steady increases in single family starts have contrasted with wide flucutations in the apartment/multiunit sector, as builders cut back in the face of a surplus in condominiums brought on by oversupply and foreclosures.

Although the increases are a good sign for the housing market, many analysts predict rough times are still ahead. A report released earlier this week by Deutsche Bank AG of New York predicted housing prices will decline another 10.5 percent before bottoming out in the second quarter of next year.

Unemployment claims slow slightly

Unemployment continues to rise, although the rate of increase seems to be slackening. Initial unemployment filings declined by 12,000 for the week ending Sept. 12, according to figures released today by the Labor Department, to 547,000. The four-week moving average is down as well, down 8,750 to 563,000.

Total unemployment claims were up 129,000 for the week, to 6,230,000, although the four-week average showed a slight decline, down 5,500 to 6,180,000.

Other reports issued earlier this week showed improvements in both retail sales and manufacturing output, buttressing Federal Reserve Chairman Ben Bernanke's assertion this week that the recession has probably ended, although economic growth will likely remain sluggish. Unemployment is typically one of the last things to improve after the technical end of a recession, as economic output needs to expand before a demand for additional workers is created.