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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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Thursday, July 17, 2014

June 2014 Residential Permits, Starts and Completions

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Total housing starts retreated in June, to a seasonally adjusted and annualized rate (SAAR) of 0.893 million units. That was 92,000 fewer units (-9.3 percent) than May’s 0.985 million, and 19.2 percent below November’s peak of 1.105 million units. The preponderance of the decrease occurred in the single family component (-57,000 units or 9.0 percent); multi-family: -35,000 units (9.9 percent). 
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The year-over-year percentage change in total starts slowed again in June, falling to 5.6 percent. Single-family starts were 3.9 percent below year-earlier levels; the more volatile multi-family component jumped up to 34.8 percent, however. 
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Completions dropped by 108,000 units (-12.0 percent) in June, to 789,000 units SAAR. The multi-family component dominated the decrease (-67,000 units or 24.8 percent); single-family completions: -41,000 units or 6.5 percent. Total completions were 4.8 percent above year-earlier levels, however. 
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Total permits retreated by 42,000 units (-4.2 percent) SAAR, to 963,000 in June. The decrease occurred entirely in the multi-family component (-58,000 units or 14.9 percent). Single-family permits rose by 16,000 units (2.6 percent). Total permits were 6.7 percent above year-earlier levels -- single- and multi-family components were, respectively, 5.9 and 8.1 percent higher.
Time will tell whether June marked an end to the slide in the rate of annual growth in total permits seen since late 2012. It may, as the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) rose four points in July, to 53. An index value above 50 means more builders feel the market is good than feel it is poor. “This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace,” said NAHB Chairman Kevin Kelly. 
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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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