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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Wednesday, March 19, 2014

February 2014 Residential Permits, Starts and Completions

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Total housing starts were nearly unchanged in February, inching down to a seasonally adjusted and annualized rate (SAAR) of 907,000 units. That was 2,000 fewer units (-0.2 percent) than January’s upwardly revised 909,000, and nearly 18 percent below November’s peak of 1.101 million units. The multi-family component contributed all of the decline (-4,000 units or -1.2 percent) since the single-family component increased by 2,000 units (0.3 percent).
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The year-over-year percentage change in total starts contracted for the first time since August 2011, dropping to -5.6 percent. Single-family starts were 9.3 percent below February 2012’s levels; the multi-family component was still “in the black” with +1.8 percent.
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Completions rose modestly (+37,000 units or 4.4 percent) in February, to 886,000 units SAAR. The increase was greater in the single-family component (24,000 units versus 13,000 multi-family units). Total completions were 22.9 percent above year-earlier levels.
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Total permits jumped by 73,000 units (7.7 percent) SAAR, to 1.018 million in February -- more than making up for January’s decline. The increase occurred entirely in the multi-family component (84,000 units or 24.3 percent); single-family permits fell by 11,000 units (-1.8 percent). 
Despite February’s uptick in the year-over-year percentage change in total permits (7.3 percent), the rate of growth extended the slowing trend seen since late 2012. This trend is most readily apparent in the recent erosion of builder confidence. The National Association of Home Builders confidence index rose one point (to 47) in March after plummeting (by the largest monthly drop in the survey’s history) into negative sentiment territory during February. An index reading below 50 means more builders think market conditions are poor than think they are good.
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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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