Monday, June 20, 2011

Housing starts in West hit 33-month high

Housing starts in the West Census region of the US, which includes Colorado, were up 21 percent from May 2010 to May 2011, 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 13,700 housing units started in the West during May 2011. Of the new units started, 9,000 were single-family structures and 4,700 were structures containing more than one housing unit.

Nationally, housing starts fell 1 percent during the same period, with total housing starts falling to a total of 55,600.

The first graph shows the overall trend of housing starts nationally and in the West census region. Total housing starts remain near ten year lows in both measures.

The West census region includes California, so given the size of the West census region, the fact that total housing starts are at 13,700 indicates that new home construction continues to be very light throughout the region. Housing starts totals ranging from 35,000 to 45,000 were common from 2004 to 2006.

The second graph shows the difference between single-family starts and starts for structures with more than one housing unit. Both remain near ten-year lows, and single-family starts fell 2 percent from May 2010 to May 2011. Starts for structures with more than one unit, however, increased by 123 percent during the same period. Given recent data showing strength in the demand for rental-housing, the housing starts data may suggest that developers of rental housing are beginning to move forward with construction of new multifamily structures.

The third graph shows month-by-month comparisons in housing starts for each year. MAy's housing starts total increased from April to May as was expected. May tends to be a robust month for new housing starts. However, the May 2011 total of 13,700 starts is the third-lowest total for May housing starts in more than 10 years. On the other hand, May produced the largest number of housing starts reported in any month since October 2008 suggesting that stability may be returning to the market for new construction.