Tag Archives: housing Completions

Starts and Completions: Multi-family and Single Family

Starts and Completions: Multi-family and Single Family

by Bill McBride on 10/17/2012  

Three-fourths of the way through 2012, single family starts are on pace for about 520 thousand this year, and total starts are on pace for about 750 thousand. That is an increase of about 20% from 2011.

The following table shows annual starts (total and single family) since 2005 and an estimate for 2012.

Housing Starts (000s)
Total Change Single Family Change
2005 2,068.3 1,715.8
2006 1,800.9 -12.9% 1,465.4 -14.6%
2007 1,355.0 -24.8% 1,046.0 -28.6%
2008 905.5 -33.2% 622.0 -40.5%
2009 554.0 -38.8% 445.1 -28.4%
2010 586.9 5.9% 471.2 5.9%
2011 608.8 3.7% 430.6 -8.6%
20121 750.0 23.2% 520.0 20.8%
12012 estimated

And the growth in housing starts should continue. My estimate is the US will probably add around 12 million households this decade, and assuming no excess supply, total housing starts would be 1.2 million per year, plus demolitions and 2nd home purchases. So housing starts could come close to doubling the 2012 level over the next several years – and that is one of the key reasons I think the US economy will continue to grow.

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.

Multifamily Starts and completionsClick on graph for larger image.

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, but still well below the 1997 through 2007 level of multi-family completions.

Single family Starts and completionsThe 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!).

Read more at http://www.calculatedriskblog.com/2012/10/starts-and-completions-multi-family-and.html

Leave a comment

Filed under Housing

Housing Starts increased sharply to 872 thousand SAAR in September

Housing Starts increased sharply to 872 thousand SAAR in September

by Bill McBride on 10/17/2012 

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 872,000. This is 15.0 percent above the revised August estimate of 758,000 and is 34.8 percent above the September 2011 rate of 647,000.

Single-family housing starts in September were at a rate of 603,000; this is 11.0 percent above the revised August figure of 543,000.

Building Permits:
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 894,000. This is 11.6 percent above the revised August rate of 801,000 and is 45.1 percent above the September 2011 estimate of 616,000.

Single-family authorizations in September were at a rate of 545,000; this is 6.7 percent above the revised August figure of 511,000.

Total Housing Starts and Single Family Housing StartsClick on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years. Starts are slowing increasing.

Total housing starts were at 872 thousand (SAAR) in September, up 15.0% from the revised August rate of 758 thousand (SAAR). Note that August was revised up from 750 thousand.

Single-family starts increased 11.0 to 603 thousand in September.

The second graph shows total and single unit starts since 1968.

Total Housing Starts and Single Family Housing StartsThis shows the huge collapse following the housing bubble, and that total housing starts have been increasing lately after moving sideways for about two years and a half years.

Total starts are up about 80% from the bottom start rate, and single family starts are up 70% from the low.

This was way above expectations of 765 thousand starts in September. This was partially because of the volatile multi-family sector, but single family starts were up sharply too – and above 600 thousand SAAR for the first time since 2008. Right now starts are on pace to be up about 25% from 2011.

Read more at http://www.calculatedriskblog.com/2012/10/housing-starts-increased-sharply-to-872.html

Leave a comment

Filed under Housing