New Residential Housing Starts Inch Down In January

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for January new residential housing starts. The latest reading of 1.567M was above the forecast of 1.425M and a decrease from the previous month's revised 1.626M.

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

Housing Starts

Privately‐owned housing starts in January were at a seasonally adjusted annual rate of 1,567,000. This is 3.6 percent (±13.3 percent)* below the revised December estimate of 1,626,000, but is 21.4 percent (±12.2 percent) above the January 2019 rate of 1,291,000. Single‐family housing starts in January were at a rate of 1,010,000; this is 5.9 percent (±11.6 percent)* below the revised December figure of 1,073,000. The January rate for units in buildings with five units or more was 547,000. [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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