Thursday, February 16, 2012

Housing starts up 6.7 percent in U.S. West

Housing starts in the West Census region of the US, which includes Colorado, were up 6.7 percent from a year earlier during January, 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 9,100 housing units started in the West during January 2012. Of the new units started, 6,300 were single-family structures and 2,800 were structures containing more than one housing unit.

Nationally, housing starts rose 14 percent during the same period, with total housing starts rising to a total of 45,900.

Total housing starts remain well below peak levels both nationally and in the West. January 2012 housing starts in the West were 83 percent below the peak reached during May 2004. Nationally, January was 76 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 86 percent below peak levels while multifamily starts are only 76 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 6.7 percent from January 2011 to January 2012. Starts for structures with more than one unit increased by 64 percent during the same period, rising from 1,700 units during January 2011, to 2,800 units during January 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 are beginning 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. January's housing starts total was a 13 percent decrease from December. Nationally, the increase during the same period was 6.7 percent.

As can be seen in the second graph, January housing starts were at a three-year high.

More sustained growth was visible in starts for structures with more than one housing unit. January was the fifth month in a row in which multifamily housing starts grew, year over year. As can be seen in the third graph, the January 2012 multifamily total for starts were at a three-year high.

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.