Single-family Housing Starts idled last month, dropping just 3,000 units from the month prior, or 0.2%.
According to the Commerce Department’s report, February marked the 8th straight month in which Housing Starts straddled the half-million marker, dating back to June 2009.
This is a different slant on the Housing Starts story as told by the press.
Most publications are reporting that Housing Starts fell 5.9 percent in February. Technically, this is true. Housing Starts did fall 5.9 percent last month. However, the Housing Starts data is comprised of three parts:
- Single-Family Housing Starts
- 2-4 Unit Housing Starts
- “Apartment Building” Housing Starts (i.e. 5 or more units)
The press tends to lump all 3 together but that’s not relevant for everyday homeowners and buyers.
2-4 unit homes, and apartments and condos are a different housing class as compared to single-family homes and are notoriously volatile, too. Single-family starts are more steady and better reflect the country’s housing stock.
Single-family housing starts are up 32 percent over the last 12 months.
Meanwhile, the pace of new buyers has not kept up with the pace of new housing stock. Therefore, because home prices are based on supply-and-demand, the price for a newly-built home was down, on average, 7 percent nationwide in January.
With the federal home buyer tax credit expiring soon, home buyers in Manhattan will likely create new demand for homes. And with Housing Starts holding steady near 500,000, that should push prices higher through the spring months.
