New housing starts continue to grow strongly. The 12-month rolling total of starts which is a more statistically robust measure of trends in housing start data grew 11.9% year-over-year in February to 1,131,400 starts. This represents the most starts in a 12-month period since June 2008. Though the upward trend is good news for the housing sector, the 12-month rolling total is still 21% below a 50-year average of 1,444,619 starts. However, this is up from 23% below the 50-year average in January.
Starts of 5+ unit buildings have also shown strong growth over the past year, increasing 12.4% from a 12-month rolling total of 343,500 in February 2015 to 386,000 in January 2016. Multifamily starts in 5+ unit buildings continue to hover around a 42-year high, but has shown recent signs of a downward trend as a share of all new starts. This slight downward trend of new starts in multifamily units which tend to primarily consist of renter occupied units is likely a result of an increase in single-family starts as well rather than a drop in investment by multifamily builders. The share appears to be continuing into a plateau phase, so we expect the rise in multifamily starts to continue to flatten during the remainder of the year.
Finally, regional housing starts continue to show disparities. The South leads the country with a 12-month rolling total of 567,700 new starts, which is the best 12-month span since June 2008. The 12-month rolling total for the Midwest in February was 156,100 units. The Northeast led the country in year-over-year growth, increasing by 33.8% and growing from a 12-month rolling total of 106,200 new starts in February 2015 to 142,100 in February 2016. New starts in the West remain solid, with a 12-month total of 266,500 and year-over-year growth of 13.6%. The disparity between the Midwest and other regions mirrors relatively slower economic growth in Midwestern markets and continued expansion in the South and West.
Housing Starts Summary:
- The 12-month rolling total of new housing starts in February were up 11.9% year-over-year;
- The 12-month rolling total of new housing starts in 5+ units in January was up 12.4% year-over-year, and makes up over a third of new starts.
- The 12-month rolling total of housing starts in the South continues to be the best since June 2008.