by Calculated Risk on 8/05/2013 06:12:00 PM

CR Note: Tom Lawler mentioned in a previous note that the Census Bureau will probably revise down New Home sales for the first half. The table below is on starts and completions. Early this year I mentioned: "I've heard some builders might be land constrained in 2013 (not enough finished lots in the pipeline)." That has shown up in the results (fewer communities), but will probably be resolved soon as Lawler notes below.

From housing economist Tom Lawler: First Half Housing: MF Starts a Bit Above, SF Starts Below Consensus; Builder Buying of Land/Lots Over Last Year to Boost SF Production “Soon”

US Housing Starts (000's)
	Total	SF	MF
2010	586.9	471.2	115.7
2011	608.8	430.6	178.2
2012	780.6	535.3	245.3
2013 H1 SAAR	914.7	611.5	303.2
US Housing Completions (000's)
2010	651.7	496.3	155.4
2011	584.9	446.6	138.3
2012	649.2	483.0	166.2
2013 H1 SAAR	736.7	559.7	177.0

While overall housing starts in the first half weren’t that different from consensus, the mix was different, with SF starts somewhat below but MF starts somewhat above consensus. SF starts were in all likelihood lower than what home builders would have liked, reflecting labor shortages, some materials’ shortages, and developed lot “shortages.” (Recall that the NAHB Housing Market Index dipped from January to April of this year, in part because of labor/other shortages as well as spikes in lumber costs).

Home builders as a group have, however, increased their acquisitions of land/lots significantly, and as a group are planning a significant increase in active communities and homes for sale. E.g., for the nine publicly-traded builders I track who report on a “MJSD” basis (DHI, PHM, RYL, NVR, SPF, MDC, MTH, MHO, and BZH), their combined number of lots controlled at the end of this June was up 23.6% from a year ago, with only Pulte (with its “balanced approach” strategy) not showing an increase.

Click on graph for larger image.

Here is some history of lots owned or optioned by D.R. Horton, the nation’s largest home builder (Horton’s FY ends in September).

The second graph are some historical stats for lots owned or optioned at Toll Brothers, the self-proclaimed “leading builder of luxury homes.” The latest data available are for April 30, 2013 – Toll reports on a JAJO basis, and its FY ends on Halloween.

Note that both the largest builder of “affordable” homes and the leading builder of luxury homes went on a speculative land/lot “buying spree” in 2004 and 2005, exacerbating the real estate bubble.