by Calculated Risk on 4/19/2019 11:31:00 AM

Earlier: Housing Starts Decreased to 1.139 Million Annual Rate in March

Total housing starts in March were below expectations, however starts for January and February, combined, were revised up slightly.

The housing starts report released this morning showed starts were down 0.3% in March compared to February, and starts were down 14.2% year-over-year compared to March 2018.

Single family starts were down 11.0% year-over-year, and multi-family starts were down 21.8%.

This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red).

Click on graph for larger image.

Starts were down 14.1% in March compared to March 2018.

The year-over-year weakness in March was in both the single family and multi-family sectors.

Last year, in 2018, starts were strong early in the year, and then fell off in the 2nd half - so the early comparisons this year are the most difficult.

My guess is starts will be down slightly year-over-year in 2019 compared to 2018, but nothing like the YoY decline we've seen in February and March.

Below 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) increased steadily for several years following the great recession - but turned down, and has moved sideways recently.  Completions (red line) had lagged behind - however completions and starts are at about the same level now. 

As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR).

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.

Note the relatively low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions.