Housing starts moved over one million units at annual rates in March, the highest level since June, 2006, adding more positive news to the housing picture. However, much of the activity is in apartment construction, not single family homes despite reports of low inventories and aggressive bidding in many markets. The charts show total housing starts and single family house starts since 1997 and the percentage of total housing starts that are single family homes. The percentage rises in economic rebounds and sinks in recessions.
As seen in the second chart, the share of single family homes dropped in the Great Recession, rebounded as the economy turned up and gained during the first time home buyers tax incentive program, but then slid the last two to three years of slow recovery. The recent reports show single family homes accounting for about 60% of total starts, a relatively low level. The red line is a six month moving average that smooths out much of the monthly volatility in the data. Sales of existing and new single family homes have rebounded from low levels of a year or two ago, but are far from boom levels. At the same time, reports of low supplies raise other questions — with sales seeing some gains and prices up 8% from a year ago according to S&P/Case-Shiller Home Price Indices, why aren’t more homes being put up for sale or built? Apparently the better economic news hasn’t erased all the anxiety left by the housing bust and recession.