US Housing Starts: Dec and Full-Year 2018

Widely-anticipated real estate data out of the USA emerged this week. Looking in-depth, Madison’s cautions “beware how you view the data”, as some analysts could be interpreting a much-overestimated pessimistic view of the latest monthly data and that for 4Q 2018

US Housing Starts: December, FY 201

Long-awaited data Tuesday showed the number of US homes being built in December 2018 plunged to the lowest level in more than two years, a possible sign that developers are anticipating fewer new houses to be sold this year. The USCommerce Department said housing starts fell 11.2 per cent in December from the previous month to a seasonally adjusted annual rate of 1.08 million.
This is the slowest pace of construction since September 2016.
Over the past 12 months, housing starts have tumbled -10.2%. December’s decline occurred for single-family houses and apartment buildings.
Permits to build housing, an indicator of future activity, increased just +0.3% in December. Among single-family houses, permits fell -2.2% in December and 5.5% from a year ago

Key US Housing Starts Insights: Bloomberg

  • The decline, corresponding with the worst December for US stocks since the Great Depression, underscores the broader slowdown in housing in recent months. Elevated prices continue to challenge buyers, while builders are coping with higher labor and material costs amid tariffs on imported items such as steel.
  • At the same time, declining mortgage rates, along with a solid labor market with rising wages, are likely to support demand.
  • An earlier report showed homebuilder sentiment in December tumbled to the lowest level in more than three years, according to the National Association of Home Builders/Wells Fargo. The figure has since rebounded, indicating a pickup in optimism for demand this year.

Single-family housing starts have dropped about -40% this millennium despite the US population having grown about +17.2% to around 327 million people over the same time period, according to data compiled by Bloomberg. — Bloomberg


Single-family starts fell -6.7% to a two-year low and permits for the category slumped. Starts for multifamily homes with five or more units, a category that tends to be volatile and includes apartment buildings and condominiums, fell -22%. Starts for November were revised down from a 1.26 million pace.
Three of four regions posted declines, led by a -26.3% drop in the West.
One sign that builders will stay busy in coming months: About 187,000 homes were authorized but not yet started in December, the most since 2007.

  • ALSO: Madison’s Lumber Prices, weekly, are a good forecast indicator of US home building materials’ buying for future building needs ——> DETAILS

Starts for the multi-family housing segment dropped -20.4% to a rate of 320,000 units in December. Permits for the construction of multi-family homes rose +4.9% to a pace of 497,000 units.