Housing starts

RECENT NEWS
Wall Street Journal  Feb 18  Comment 
Builders slowed new-home construction last month after a brisk December, pointing to uneven demand in an otherwise slowly recovering housing market.
Clusterstock  Feb 18  Comment 
Housing starts and building permits fell in January. The pace of starts fell 2.0% to an annualized rate of 1.065 million. This was a bit worse than the 1.07 million rate expected by economists. Single family starts fell by 6.7%, while...
The Hindu Business Line  Feb 17  Comment 
Tata Housing Development Company has started five affordable housing projects, including one in the city, a top official of the company said today.“We are setting up five affordable housing...
MarketWatch  Jan 21  Comment 
The pace of construction started on new U.S. homes rose last month to cap the strongest year in seven, according to government data released Wednesday. For all of 2014, there were 1.01 million total housing starts.
Wall Street Journal  Jan 21  Comment 
A burst of groundbreakings for single-family homes last month offered hope a key segment of the housing market is revving up after years of malaise.
Yahoo  Jan 21  Comment 
Groundbreaking for U.S. single-family homes raced to the highest level in more than 6-1/2 years in December and permits surged, in a hopeful sign for the sluggish housing market recovery. Housing has lagged an acceleration in economic growth, but...
Clusterstock  Jan 21  Comment 
Housing starts rose 4.4% in December to an annualized pace of 1.09 million, much better than expectations. Expectations were for housing starts to rise 1.2% from the prior month to an annualized pace of 1.04 million. Building permits,...




 
TOP CONTRIBUTORS

Housing starts is a closely-watched indicator of the health of the home construction industry. Homebuilding is a major component of the overall economy due to all its size and its linkages with finance, basic materials, home furnishings and appliances, employment and overall growth.

Source

The Census Bureau, together with the Department of Housing and Urban Development (HUD) jointly report on new residential construction each month. The report has three components: Building permits, housing starts and housing completions. See [[1]]

Image:starts.png


Discussion

  • Housing starts is a measure of the number of privately-owned new housing units that began construction in the reporting month. It is usually reported at the seasonally adjusted annual rate (SAAR). The most recent peak in starts was 1.8 million units in November 2006. In February of 2008 the SAAR was 1,065,000. (These figures include all housing types except mobile homes/manufactured housing.)
  • Before a housing unit is built a building permit is issued. In a sense, building permits are a leading indicator of how many starts there will be in a month or two. In February 2008 the SAAR for permitted units was 978,000, some 7.8% below the revised January rate.
  • Housing completions tells us how many of the homes that were permitted and started have been finished. This measure doesn’t get much attention by the media or most investors. As of February 2008 completions were at the SAAR of 1,208,000, which is about 8.8% below January and 26% below the rate one year earlier.


Note

In general, and for a variety of reasons, starts are usually about 2.5% less than permits and completions are about 4.0% less than starts. The greatest variability is in the multifamily sector, where starts have been 22.5% less than permits (mostly due to reclassification to single-family) and completions have been 7.5% less than starts.

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