The four major U.S. geographic sub-regions — the Northeast, Midwest, South and West — all had levels of housing starts in December 2007 that they would like to forget. There was not a single month-to-month gain in the group. Comparatively, the South performed best, with a decline versus November of only -3.3%. The story got progressively worse from there, with the West at -19.6%, the Northeast at -25.8% and the Midwest at -30.8%.

Preliminary Annual Results
With the arrival of December numbers, the preliminary annual totals are now available. On a full-year basis, 2007 versus 2006, the West (-27.8%) had the sharpest decline in housing starts, followed by the South (-25.3%), the Midwest (-24.7%) and the Northeast (-14.9%). These figures are set out in the text boxes that appear with the accompanying charts.

As can also be seen from the charts, the monthly pattern of starts has been a downward slide throughout both 2006 and 2007. Therefore, the end-of-year levels were considerably below the averages for the year. This will play a role in calculating the full-year 2008 starts figure versus the full-year 2007 figure. In 2008, the monthly numbers will level off during the year (and, in some cases, even edge upwards), but the annual numbers will be further depressed compared to last year.

The Regional Housing Start Forecasts
Reed Construction Data (RCD) is forecasting a housing-start level of 133,000 units in the Northeast in 2008 versus 142,000 units in 2007, a decline of 6.3%. This will be the smallest decline among the regions. The Midwest will drop to 173,000 units in 2008 (-18.0%) from 211,000 units in 2007; the South to 560,000 (-17.6%) from 680,000; and the West to 234,000 (-27.1%) from 321,000.

In 2009, all of the declines will be reversed and by almost equivalent orders of magnitude: the Northeast +11.3%; Midwest +26.0%; South +19.8%; and West +27.8%. For more on RCD’s current construction forecasts (with tables), please see the story entitled, December Construction Spending Falls Sharply.

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