The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts jumped 25.5 percent in October to the fastest monthly pace since August 2007. New residential construction increased from an annualized 1,054,000 in September to 1,323,000 in October. To be fair, both of those figures are outliers to the year-to-date average of 1,169,100, with September’s surprising fall in activity followed by the strong rebound in October. Yet, the upward movement in this latest report is encouraging. Indeed, both single-family (up from 785,000 to 869,000) and multifamily (up from 269,000 to 454,000) made healthy gains in October, with single-family construction starts reaching a nine-year high. While I would expect a pullback in the November data to something closer to trend, housing starts should exceed 1.2 million by year’s end, which is positive. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts were weaker in August, once again pulling back after passing the 1.2 million units threshold. New residential construction activity decreased from an annualized 1,212,000 units in July to 1,142,000 in August, a decline of 5.8 percent. As such, it stood in contrast to yesterday’s strong jump in home builder confidence from the National Association of Home Builders. That figure suggested that builders were quite optimistic about the next six months, spurred by modest economic growth and historically low mortgage rates. Along those line, I continue to expect 1.21 million housing units started by year’s end despite today’s disappointing numbers for August, particularly for single-family activity. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts rose to a three-month high in June, recovering a bit from a springtime lull. New residential construction activity increased from an annualized 1,135,000 in May to 1,189,000 in June. This was not far from 1.2 million units, a threshold that the market seems unable to maintain of late. Nonetheless, I would expect 1.21 million housing units started by year’s end. Indeed, residential construction remains one of the brighter spots in the economy, and builders remain mostly upbeat about the next six months, according to the National Association of Home Builders. With that said, housing starts were off 2.0 percent over the past 12 months, mainly from volatility in the multifamily segment. Single-family starts were more indicative of recent strength, up 13.4 percent year-over-year.
In this report, both single-family (up from 745,000 to 778,000) and multifamily (up from 390,000 to 411,000) starts data were higher in June. New single-family residential construction activity grew at its fastest pace since February, and they continue a slow-but-steady trend higher. Single-family housing starts have averaged 776,333 year-to-date in 2016 through June, up from 675,833 for the same time frame in 2015. At the same time, the multifamily starting pace represented a nine-month high, with these figures experiencing large swings from month-to-month. The year-over-year comparison was skewed by an outsized gain in activity in June 2015 to 527,000 units. If you exclude that outlier, multifamily starts rose from an average of 368,800 through the first 5 months of 2015 to an average of 379,167 in the first half of 2016.
Meanwhile, housing permits increased from 1,136,000 to 1,153,000, a four-month high. Permits were slightly higher for both single-family (up from 731,000 to 738,000) and multifamily (up from 731,000 to 738,000) units. Permits are often a proxy for future activity, and in that light, the gain was somewhat encouraging, even if we might prefer faster growth. Much like the housing starts numbers, the year-over-year data were off sharply, down 13.6 percent from 1,334,000 housing permits in June 2015. The prior year’s permitting rate was skewed by strong multifamily activity, as noted above. Excluding that figure, growth in permits has been essentially unchanged, up from an average of 1,140,400 in the first 5 months of 2015 to 1,141,000 in the first half of 2015.
The Census Bureau and the U.S. Department of Housing and Urban Development reported that new housing starts fell 0.3 percent, down from an annualized 1,167,000 in April to 1,164,000 in May. This was not far from the year-to-date average of 1,157,000 units, and yet, the data were somewhat disappointing in that we would hope to see a pickup in activity by this point in the year. Along those lines, builder confidence edged higher in June to a five-month high, and we would expect to see better housing starts moving forward, building to 1.24 million units by year’s end, according to current forecasts. Indeed, residential construction remains one of the brighter spots in the economy, even with starts not changing much in the May data. Housing starts have increased 9.5 percent over the past 12 months. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts fell 8.8 percent, down from an annualized 1,194,000 in February to 1,089,000 in March. This was a surprising drop, with the consensus estimate calling for roughly 1,180,000 units being started for the month. Both single-family (down from 841,000 to 764,000) and multifamily (down from 353,000 to 325,000) starts were lower for the month, with declines in every region except for the Northeast. Single-family activity slowed to a five-month low, whereas the highly volatile multifamily component decreased to its slowest pace in 13 months.
With that said, residential construction has been one of the better aspects in the U.S. economy over the past year, and even with the sharp decline in this report, housing starts rose by 14.2 percent year-over-year, up from 954,000 in March 2015. The bulk of that growth stemmed from the single-family segment, which has increased 22.6 percent year-over-year. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts rose 5.2 percent, up from an annualized 1,120,000 in January to 1,178,000 in February. The January starts figure was originally estimated to be 1,099,000 units; therefore, the decline from bad weather in the prior report was not as bad as originally thought. More importantly, these data continue to reflect a housing market that is making slow-but-steady progress in the right direction, particularly over the longer-term. Along those lines, new housing starts have jumped 30.9 percent year-over-year, up from just 900,000 units seen in February 2015. The bulk of that growth stemmed from the single-family segment, which has increased 37.0 percent year-over-year. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts declined 3.8 percent, down from an annualized 1,143,000 in December to 1,099,000 in January. Bad weather likely contributed to this decline, dampening construction activity. Despite the recent easing, the longer-term trend continues to move slowly-but-surely higher, up from an average of 1,067,833 in the first half of 2015 to 1,137,714 over the past seven months. With that said, these data have been highly volatile from month-to-month, especially the multifamily segment, and the current pace was not much higher than the 1,080,000 figure seen in January 2015. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts eased 2.5 percent, down from an annualized 1,179,000 in November to 1,149,000 in December. This was near the average observed in the second half of 2015, which was 1,146,000, up from an average of 1,068,000 in the first half of the year. Housing starts averaged 1,111,200 for 2015 as a whole, up 10.8 percent from the 2014 average of 1,003.300. As such, it reflects gradual improvements in residential construction over the longer term, even with the slight pullback in December activity.
Reduced single-family housing starts (down from 794,000 to 768,000) helped to explain the decrease in December, with multifamily activity also off marginally (down from 385,000 to 381,000). On the positive side, single-family residential construction in December was not far from November’s post-recessionary high, and starts in the single-family segment were up 10.4 percent in 2015. Multifamily activity has been more volatile in 2015, ranging from a low of 300,000 in February to a high of 466,000 in September. Yet, multifamily starts have also trended higher, up 11.3 percent for the year.
Housing permits also provided some encouragement, up 12.0 percent in 2015 from the average seen in 2014. Yet, permits edged lower for the month, down from 1,282,000 in November to 1,232,000 in December. The underlying data were mixed, with single-family permits higher (up from 727,000 to 740,000) and multifamily activity lower (down from 555,000 to 492,000). The single-family permits figure was the highest since December 2007, which was the first official month of the Great Recession. Since housing permits can be seen as a proxy of future residential construction activity, this is a real sign of progress and comfort for 2016.
This perhaps helps to explain why homebuilders remain optimistic, as noted in the National Association of Home Builders (NAHB) and Wells Fargo report released yesterday. The National Association of Home Builders (NAHB) and Wells Fargo said that the Housing Market Index (HMI) was unchanged in January at 60. Numbers over 50 indicate that builders are more positive than negative on net in their views of the housing market. January’s reading was the seventh consecutive month with the HMI at 60 or higher, suggesting that home builders remain mostly optimistic about the current pace of growth. Still, the headline number has decelerated after reaching a 10-year high of 65 in October, with sentiment easing a bit since then. Data were weakest in the Northeast and strongest in the West, and confidence picked up a little in January in the Midwest.
Moving forward, home builders remain upbeat about single-family sales over the next six months. While the sales index of expected single-family activity has decelerated from 75 in October to 63 in January, this continues to indicate strong demand expectations in the outlook.
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts rebounded in November after a relatively soft October. New residential construction starts rose from 1,062,000 units at the annual rate in October to 1,173,000 units in November. This was just shy of the 1,207,000 pace seen in September. This report continues to reflect upward movement in residential activity, with housing starts averaging 1,154,000 over the past six months, up from 1,046,000 in the six months prior to that. Indeed, housing starts have risen a healthy 16.5 percent year-over-year, up from 1,007,000 units in November 2014.
Single-family (up from 714,000 to 768,000) and multifamily (up from 348,000 to 405,000) housing starts were both higher for the month, with single-family activity rising to its highest level since January 2008. On a year-over-year basis, single-family and multifamily starts have increased 7.6 percent and 16.4 percent, respectively. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts once again exceeded 1.2 million in September. New residential construction starts were up from an annualized 1,132,000 units in August to 1,206,000 units in September, which kept residential activity near the eight-year high of 1,211,000 units in June. Overall, this report shows continued progress in the housing market. Indeed, housing starts have risen a healthy 17.5 percent year-over-year, up from 1,026,000 units in September 2014.
Still, much of the movement in recent months in the headline starts number has come from the multifamily segment, up from 394,000 in August to 466,000 in September. Illustrating the volatility in the data, multifamily starts have ranged from a low of 300,000 in February to a high of 524,000 in June, with the latter representing the fastest pace since November 1987. Meanwhile, single-family starts have plodded generally higher without much volatility from month to month, up from 738,000 in August to 740,000 in September. Since bottoming out at 600,000 units in February, single-family starts rose to a 7½-year high in July with 759,000 units. Over the past three months, single-family starts have averaged 745,667, indicating strong momentum year-to-date. On a year-over-year basis, single-family starts have risen 12.0 percent.
In contrast to the housing starts data, residential permitting was off this month. New housing permits declined from 1,161,000 units at the annual rate in August to 1,103,000 units in September. This data has averaged 1,131,333 units over the past three months (July through September), representing a fall-off from the more-robust paces of 1,250,000 and 1,337,000 units in May and June, respectively. Before getting too worked up over this, however, it is important to note that much of the recent decline stems from weaker multifamily permitting. In June, permits soared to 645,000 units, skewed higher by the expiration of tax credits in New York. Since then, they have settled lower, down from 462,000 in August to 406,000 in September.
On a more positive note, single-family housing permits edged down a little, down from 699,000 in August to 697,000 in September. This was up from 626,000 in February and 653,000 in September 2014. As such, year-over-year growth for single-family permitting was up 6.7 percent, a fairly decent pace. This should bode well moving forward for new residential construction.
This should help to explain the strong confidence numbers from the National Association of Home Builders (NAHB) and Wells Fargo, which were released yesterday. The Housing Market Index rose from 61 in September to 64 in October, its highest level since October 2005. Index values over 50 suggest that home builders are more confident than not in their economic outlook, and the HMI has now exceeded that threshold for 16 straight months. Indeed, this measure has trended in the right direction over the past 12 months, up from a reading of 54 one year ago. Nonetheless, NAHB Chairman Tom Woods also offered some words of caution. He said, “…our members continue to tell us there are still pockets of softness in some markets across the nation, and that they face challenges regarding the availability of lots and labor.”
The largest gains in confidence in October stemmed from the Northeast and the West, with softer data coming out of the Midwest. Yet, home builders were mostly upbeat about single-family home sales over the next six months. The forward-looking index of sales activity rose from 68 to 75, its highest point since August 2005. That should provide some encouragement for the residential housing moving ahead.
Chad Moutray is the chief economist, National Association of Manufacturers.