New Residential Housing Starts In December Beat Consensus

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By Doug Short

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential housing starts.

The latest reading of 1.226 million was above the Investing.com forecast of 1.200 million. The November count was revised upward by 12K.

Here is the opening of Thursday morning's monthly report:

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,226,000. This is 11.3 percent (±10.4%) above the revised November rate of 1,102,000 and is 5.7 percent (±12.0%)* above the December 2015 rate of 1,160,000.

Single-family housing starts in December were at a rate of 795,000; this is 4.0 percent (±9.2%)* below the revised November figure of 828,000. The December rate for units in buildings with five units or more was 417,000.

An estimated 1,166,400 housing units were started in 2016. This is 4.9 percent (±2.5%) above the 2015 figure of 1,111,800. [link to report]

Here is the historical series for total privately owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

The Population-Adjusted Reality

Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in US population since 1959. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

A Footnote on Volatility

The extreme volatility of this monthly indicator is the rationale for paying more attention to its 6-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change is 6.3%. The MoM range minimum is -26.4% and the maximum is 29.3%.

For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1990.

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