Wednesday, March 21, 2012

Multifam housing starts up 153 percent in West region

Housing starts in the West Census region of the US, which includes Colorado, were up 41.5 percent from a year earlier during February, counting both single-family and multi-family units. According to new housing construction and housing starts data released today by the US Census Bureau, there were approximately 9,200 housing units started in the West during February 2012. Of the new units started, 5,900 were single-family structures and 3,300 were structures containing more than one housing unit.

Nationally, housing starts rose 35 percent during the same period, with total housing starts rising to a total of 48,100.

Total housing starts remain well below peak levels both nationally and in the West. February 2012 housing starts in the West were 83 percent below the peak reached during May 2004. Nationally, February was 75 percent below peak levels. The national peak in housing starts was reached during May 2005.

Multifamily starts have rebounded more than single-family starts. In the West, single-family starts are 87 percent below peak levels while multifamily starts are only 67 percent below peak levels.

The West census region includes states on the west coast and within the Rocky Mountain region.

The first graph shows the difference between single-family starts and starts for structures with more than one housing unit. Both remain near ten-year lows, but single-family starts rose 13.4 percent from February 2011 to February 2012. Starts for structures with more than one unit increased by 153 percent during the same period, rising from 1,300 units during February 2011, to 3,300 units during February of this year. Given recent data showing strength in the demand for rental-housing, the housing starts data may suggest that developers of rental housing continue to move forward with construction of new multifamily structures.

The second graph shows month-by-month comparisons in housing starts for each year in the West. February's housing starts total was a 5.7 percent increase from December. Nationally, the increase during the same period was 3.4 percent. Numbers are not seasonally adjusted.

More sustained growth was visible in starts for structures with more than one housing unit. Multifamily starts have been up over the year prior during five of the past six months. February was the fifth month in a row in which multifamily housing starts grew, year over year, and February 2012's total was up considerable from February 2011 and February 2010 totals.

This data suggests that multifamily starts have established a clear growth trend over the past several months, but overall starts activity remains well below levels seen during most of the past decade.