Eye On Housing
NAHB analysis of the Survey of Construction (SOC) shows that, nationally, there were 779,082 new single-family units started in 2016, 10% higher than 2015.
According to the NAHB tabulation of data from the 2016 Survey of Construction, new single-family housing starts were divided into the nine Census divisions, including Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, Middle Atlantic, South Atlantic, and New England. The map and figure below provide a more geographically detailed analysis on new single-family housing starts for each of the nine Census divisions.
As shown in the map, in the South Atlantic, West South Central and Mountain Divisions new single-family units started exceeded 100k in 2016. These three divisions represent 21 states, approximately 41% of the 50 states and DC, but the number of new single-family housing starts in these three divisions accounted for about 60% of the total new single-family housing starts in 2016. Additionally, there were 81,637 new single-family units started in the Pacific Division and 74,054 units started in the East North Central Division in 2016. The Pacific Division shared 10% of the total new single-family housing starts, while the East North Central Division shared 9%. The other four divisions, including East South Central, West North Central, Middle Atlantic and New England, shared 21% of the total new single-family housing starts.
The figure below shows the annual growth rate of new single-family housing starts by divisions in both 2015 and 2016. Each of the nine divisions grows at their own pace. Three out of the nine divisions, including East South Central (29%), West North Central (17%) and New England (15%), grew faster than the national level of 10% in 2016 and have experienced much more rapid growth than those in 2015. The Mountain Division also had a higher growth rate than the national level of 10% in 2016, maintaining the approximately same rate of 18% in 2015, while the growth rates of the other five divisions were below the national level. The West South Central Division was the only one having a decline of 2% in 2016.
According to NAHB analysis of the SOC data, national new single-family housing starts reached 58% of the pre-recession normal (the average of housing starts between 2000 and 2003) in 2016.
Relative to the average annual number of housing starts between 2000 and 2003, the nine divisions ranged between 43% and 86% of that level in 2016. The West South Central Division, at 86%, is closest to recovering and the West North Central Division is furthest away, at 43%. All nine divisions are off their recession-era lows relative to the average activity between 2000 and 2003, but no division has recovered.
Why is 2000-2003 the benchmark? That’s a small sample, and why those years?
AG,
The 2000-2003 real estate market is seen as “normalized”. Given the cyclical nature, supply and demand will reach equilibrium in the long run. However, we must take into account the growing population, jobs, etc.
– WZ