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May 2003

Housing Supported the 2002 Economy
Indicating that housing provided even greater support than expected to the U.S. economy in 2002, Commerce Department figures released recently show that builders ramped up production of new homes and apartments near the end of the year, finishing with a total of 1.7 million units.

This is the greatest housing production figure in 16 years and includes the largest number of 
single-family homes built in 24 years, according to the National Association of Home Builders (NAHB), based in Washington, D.C. As a positive sign for building activity heading into the middle of 2003, issuance of housing permits in 2002 also hit its highest level since 1986.

In December, housing starts rose 5 percent to a seasonally-adjusted annual rate of 1.84 million units, with a nearly 5-percent increase on the single-family side and a 5.5-percent increase on the multi-family side. The government also revised substantially upward its previous reports on housing starts for October and November, according to the NAHB.

The latest starts numbers bring the 2002 total to 1.7 million housing units produced, including 1.36 million single-family units and 345,000 multi-family units. The single-family total is the best in 24 years, while the multi-family total is the best in four years.

Starts rose across every region in December, posting gains of 18.2 percent in the Northwest, 4 percent in the Midwest, 0.6 percent in the South and 9.8 percent in the West in comparison to November’s production pace. All regions were also up solidly for 2002 as a whole in comparison to 2001.

Monthly Housing Starts January 2002-December 2002

In structures with--

Period Total 1 unit 2 to 4 units 5 units 
or more
Northeast Midwest South West
December 1,835 1,473 41 321 169 390 805 471
November 1,747 1,404 34 309 143 375 800 429
October 1,660 1,375 32 253 144 321 706 489
September 1,808 1,452 36 320 175 386 809 438
August 1,631 1,249 31 351 169 334 768 360
July 1,652 1,319 31 302 158 362 748 384
June 1,692 1,344 46 302 176 339 771 406
May 1,742 1,380 37 325 163 366 800 413
April 1,566 1,261 27 278 132 277 786 371
March 1,675 1,298 49 328 165 343 767 400
February 1,788 1,472 43 273 143 371 832 442
January 1,713 1,344 67 302 162 352 814 385
                 
Average 
relative 
3 3 3 11 8 7 4 5
standard error (%) 

Seasonally adjusted annual rate.

Thousands of units. Detail may not add to total because of rounding.

Source: NAHB


U.S. Factory-Built Housing Component Shipments to Grow More Than 5 Percent
Shipments of factory-built housing components from U.S. manufacturers are forecast to rise 5.2 percent per annum to $16.6 billion in 2006, according to a recent study, “Factory-Built Housing Components,” by the Freedonia Group of Cleveland. Advances in component demand will be bolstered by increased utilization of components on a “per structure” basis. Increased component penetration will in turn be supported by the advantages in cost, construction cycle time and product quality offered by the components relative to site-built construction methods. Gains in component use will be particularly strong from walls and partitions and I-joists, according to the Freedonia Group.

U.S. Factory-Built Housing Components

(figures in million dollars)

                                                                     Percent of Annual Growth

Item 1996 2001 2006 Jan-96 1-Jun
Factory-Built 10,340 12,910 166000 4.5 5.2
Component Shipments
Roof Trusses 5,960 7,110 8350 3.6 3.3
Walls & 2,295 2,650 3920 2.9 8.1
Partitions
Floor Trusses 835 1,265 1690 8.7 6
I-Joists 335 580 960 11.6 10.6
Roof Panels 185 225 265 4 3.3
Other 730 1,080 1415 8.1 5.6
Source: © 2002 by The Freedonia Group Inc.

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