The Commerce Department released the initial reading on housing starts in January and the 890,000 number represented a decline of 8.5% over December’s revised number of 973,000. As we typically see, the December number was revised up (from 954,000). The January change was within the margin of error, so statistically the initial January ready was meaningless as it often is. The decline in the SAAR rate was entirely caused by a statistically significant decline in multifamily starts. Meanwhile, single family starts registered the highest SAAR rate since August 2008 (after December’s initial reading was revised down).
So what can we gather from the monthly survey based data? We know that starts are up significantly year over year. Also, it looks as though single family is strengthening while multifamily is slowing down.
Contrast that with the numbers that Metrostudy collects each quarter by driving 30,000 new home subdivisions and counting lots, starts, inventory, and closings. This data is not subject to wild revisions or broad confidence intervals, and it paints a clear picture of broad recovery clearly taking root around the country.
From our data, we know that starts are up nearly 30% year over year. And across 33 regions, only one—the Rio Grande Valley of Texas—registered a decline. And many regions registered some eye-popping increases of 60% or more including Boise, St. George (Utah), Phoenix, Las Vegas, and Northern California. Even long suffering Atlanta registered an increase year over year of more than 50%.
The nation’s most important housing markets have turned a corner. Housing is on the mend, and new construction is an economic contributor we can count on for 2013. Stay tuned for accurate readings of what’s going on using real, complete, and consistent local market data.