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New Residential Housing Starts in May Better Than Forecast

June 17, 2016

by Doug Short

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts.

The latest reading of 1,164M was above the Investing.com forecast of 1.150M. The April count was revised downward by 5M, but the March count was revised upward by 14M.

Here is the opening of this morning's monthly report:

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,164,000. This is 0.3 percent (±14.0%)* below the revised April estimate of 1,167,000, but is 9.5 percent (±16.0%)* above the May 2015 rate of 1,063,000.

Single-family housing starts in May were at a rate of 764,000; this is 0.3 percent (±13.8%)* above the revised April figure of 762,000. The May rate for units in buildings with five units or more was 396,000. [link to report]

Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Housing Starts

The Population-Adjusted Reality

Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1959. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

Housing Starts Population-Adjusted

A Footnote on Volatility

The extreme volatility of this monthly indicator is the rationale for paying more attention to its 6-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change is 6.3%. The MoM range minimum is -26.4% and the maximum is 29.3%.

For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1990.


For additional perspectives on residential real estate, here is the complete list of our monthly updates: