Single-family Home Starts and Recessions

Tuesday, February 20, 2007 | 06:55 AM

Floyd Norris brings to our attention a unique statistic on Housing and Recessions

Here’s another way to look at the housing start numbers: Take a three-month moving average of single-family starts, at a seasonally adjusted rate. That smoothes out some of the weather-induced volatility.

By that measure, starts have now fallen for 11 consecutive months, and are off more than 30 percent over that period.

Here’s a list of the only four other times (going back to 1959) that the figure fell for 11 consecutive months.

1. November 1973 was the 11th month. A recession began that very month.
2. April 1980 was the 11th month. A recession began in January of that year.
3. November 1981 was the 11th month. A recession began in July of that year.
4. February 1991 was the 11th month. A recession began the previous July.

These days, almost no one thinks a recession is looming.

January 2007 was the 5th such time we have seen this phenomena -- and all four prior such instances led to a recession.

Fascinating datapoint Floyd -- thanks for pointing it out.


Housing and Recessions
Floyd Norris
NYTimes, FEBRUARY 16, 2007,  4:12 PM

Tuesday, February 20, 2007 | 06:55 AM | Permalink | Comments (19) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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» Housing and Recessions: A Proposed Relationship from A Dash of Insight
Floyd Norris, the noted financial columnist for the New York Times, has recently begun blogging in addition to writing his regular column. He recently posted some research he had conducted on the housing market and recessions. Norris takes a three-month [Read More]

Tracked on May 7, 2007 10:43:10 AM


A housing slowdown only preceded a recession once. But we have never managed to have this severe a housing slowdown even while the economy was not contracting.
Yes, this is new territory, but that does not mean it is necessarily pleasant territory. With housing this weak now, if the economy were to slow or contract, it is hard to imagine how hard housing might fall.

Posted by: Kevin Rooney | Feb 20, 2007 8:49:48 AM

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