Tuesday, April 17, 2012

Multifamily starts in U.S. West up 25 percent in March

Housing starts in the West Census region of the US, which includes Colorado, were up 12.2 percent from a year earlier during March, 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 11,000 housing units started in the West during March 2012. Of the new units started, 8,000 were single-family structures and 3,000 were structures containing more than one housing unit.

Nationally, housing starts rose 9.2 percent during the same period, with total housing starts rising to a total of 54,500.

Total housing starts remain well below peak levels both nationally and in the West. March 2012 housing starts in the West were 79 percent below the peak reached during May 2004. Nationally, March was 72 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 83 percent below peak levels while multifamily starts are only 70 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 in the West with more than one housing unit. Both remain near ten-year lows, but single-family starts in the West rose 8.1 percent from March 2011 to March 2012. Starts for structures with more than one unit increased by 25 percent during the same period, rising from 2,400 units during March 2011, to 3,000 units during March 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. March's housing starts total was a 18.2 percent increase from February. Nationally, the increase during the same period was 13.7 percent. Numbers are not seasonally adjusted.

More sustained growth was visible in starts for structures with more than one housing unit. Multifamily starts were at a four-year high during March. March was the third month in a row in which multifamily housing starts grew, year over year.

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.