Housing starts and permits usually dominate the headlines on residential construction data day. In September, for example, single-family starts increased a healthy 4.4% (total starts increased 0.3%), and single-family permits rose 0.5% (but total permits declined 5.6%).
Those are certainly important measures, but I also like to look at a third measure of residential activity in the report: the number of single-family houses under construction.
That measure suggests that the housing market has continued to deteriorate in recent months (click to enlarge):
The number of single-family homes under construction at the end of September fell to just 269,000, down about 14% from a year ago. I had once hoped that the housing market was putting in a bottom, with homes under construction plateauing at about 300,000. But we’ve now witnessed five straight months of declines.