New housing starts grew at an impressive pace in March. The 12-month rolling total of starts-which is a more statistically robust measure of trends in housing start data-grew 13% year-over-year in March to 1,143,000 starts. This represents the most starts in a 12-month period since August 2007. Though the continued upward trend is good news for the housing sector, the 12-month rolling total is still 21% below a 50-year average of 1,444,085 starts. This is unchanged from the 50-year average in February.
Starts of single-family units have also shown strong growth over the past year, increasing 14.1% from a 12-month rolling total of 653,900 in March 2015 to 746,000 in March 2016. The share in multifamily starts in 5+ unit buildings continues to drop from a 42-year high last year. This downward trend of new starts in multifamily units which tend to primarily consist of renter-occupied units is a result of the recent surge in single-family starts rather than a drop in investment by multifamily builders. We expect a rise in the share of single-family starts to continue to into the remainder of the year.
March’s employment report showed that it was the best month for residential construction jobs since November 2008. In addition, the number of jobs per housing start kicked up to 2.4, which matches the 15-year average and the largest number in nearly a year. This is due to the recent increase in single-family starts, which uses more workers per unit built than multifamily starts. As the share of multifamily starts decreases, we should expect this numer to increase in the months ahead as more labor intensive single-family starts to pick up.
Housing Starts Summary:
- The 12-month rolling total of new housing starts in March were up 13% year-over-year;
- The 12-month rolling total of new housing starts in single-family units in March was up 14.1% year-over-year;
- The number of construction jobs per start has hit the 15-year average.