This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts. The latest reading of 1.401M was just above Investing.com's forecast of 1.400M and is a 2.2% increase from the March's revised figure of 1.371M. Housing starts are down 22.3% compared to this time last year.
Here is the opening of this morning's monthly report:
Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,401,000. This is 2.2 percent (±11.9 percent)* above the revised March estimate of 1,371,000, but is 22.3 percent (±8.7 percent) below the April 2022 rate of 1,803,000. Single‐family housing starts in April were at a rate of 846,000; this is 1.6 percent (±12.3 percent)* above the revised March figure of 833,000. The April rate for units in buildings with five units or more was 542,000. [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 six-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 the 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 six-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change was 6.3%. The MoM range minimum was -27.0% and the maximum was 29.3%.
For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1960.
ETFs associated with home builders include: Invesco Dynamic Building & Construction ETF (PKB), iShares U.S. Home Construction ETF (ITB) and SPDR S&P Homebuilders ETF (XHB).
ETFs associated with residential real estate include: iShares Residential and Multisector Real Estate ETF (REZ).
For additional perspectives on residential real estate, here is the complete list of our monthly updates:
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