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 phenomenon - and all four prior such instances led to a recession.
Fascinating data point Floyd - thanks for pointing it out.
Housing and Recessions
NYTimes, FEBRUARY 16, 2007, 4:12 PM