New Residential Housing Starts Drop Again in April

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts. The latest reading of 891K was below the Investing.com forecast of 927K and a decrease from the previous month's revised 1.276M.

Here is the opening of this morning's monthly report, including a note on revisions:

Statement Regarding COVID‐19 Impact: Due to recent events surrounding COVID‐19, many governments and businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards.

Notice of Revision: With this release, unadjusted estimates of housing units authorized by building permits for January through December 2019 have been revised. Also, seasonally adjusted estimates of housing units authorized by building permits have been revised back to January 2014, and seasonally adjusted estimates of housing units authorized but not started, started, under construction, and completed have been revised back to January 2015. All revised estimates are available on our website.

Housing Starts

Privately-owned housing starts in April were at a seasonally adjusted annual rate of 891,000. This is 30.2 percent (±11.0 percent) below the revised March estimate of 1,276,000 and is 29.7 percent (±8.1 percent) below the April 2019 rate of 1,267,000. Single-family housing starts in April were at a rate of 650,000; this is 25.4 percent (±9.6 percent) below the revised March figure of 871,000. The April rate for units in buildings with five units or more was 234,000. [link to report]

Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

 

The Population-Adjusted Reality

Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1959. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

 

A Footnote on Volatility

The extreme volatility of this monthly indicator is the rationale for paying more attention to its 6-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change is 6.3%. The MoM range minimum is -26.4% and the maximum is 29.3%.

For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1990.