by Bill McBride on 9/19/2012
Two-thirds of the way through 2012, single family starts are on pace for 515 thousand this year, and total starts are on pace for about 740 thousand. That is an increase of about 20% from 2011, and is above the forecasts for most analysts (however Lawler was very close).
Here is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).
These graphs use a 12 month rolling total for NSA starts and completions.
The blue line is for multifamily starts and the red line is for multifamily completions.
The rolling 12 month total for starts (blue line) has been increasing steadily, and completions (red line) is lagging behind – but completions will follow starts up over the course of the year (completions lag starts by about 12 months).
This means there will be an increase in multi-family deliveries next year.
The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion – so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Starts are moving up, but the increase in completions has just started (wait a few months!).
For the seventh consecutive month, the rolling 12 month total for starts has been above completions – that usually only happens after housing has bottomed.