New Residential Housing Starts At 1.42M In February

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential housing starts. The latest reading of 1.421M was below the forecast of 1.560M and a decrease from the previous month's upwardly revised 1.548M.

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

Housing Starts

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,421,000. This is 10.3 percent (±10.5 percent)* below the revised January estimate of 1,584,000 and is 9.3 percent (±9.4 percent)* below the February 2020 rate of 1,567,000. Single-family housing starts in February were at a rate of 1,040,000; this is 8.5 percent (±9.3 percent)* below the revised January figure of 1,136,000. The February rate for units in buildings with five units or more was 372,000. [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.

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.

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%.

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

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