New Residential Housing Jump In December

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential housing starts. The latest reading of 1.608M was above the forecast of 1.375M and an increase from the previous month's revised 1.375M.

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

Housing Starts

Privately‐owned housing starts in December were at a seasonally adjusted annual rate of 1,608,000. This is 16.9 percent (±12.8 percent) above the revised November estimate of 1,375,000 and is 40.8 percent (±20.5 percent) above the December 2018 rate of 1,142,000. Single‐family housing starts in December were at a rate of 1,055,000; this is 11.2 percent (±10.4 percent) above the revised November figure of 949,000. The December rate for units in buildings with five units or more was 536,000.

An estimated 1,289,800 housing units were started in 2019. This is 3.2 percent (±2.3%) above the 2018 figure of 1,249,900. [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.

(Click on image to enlarge)

Housing Starts

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.

(Click on image to enlarge)

Housing Starts Population-Adjusted

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%.

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