Today’s housing data are again driving some optimistic headlines. Most notably, new starts of single-family homes in April were up more than 10% from March.
As I’ve noted in previous posts (here, for example), I think it’s useful to look not only at the number of housing starts, but also at the number of houses under construction (which reflects the pace of both starts and completions). Why? Because that gives us a sense of how much construction activity is actually taking place. As shown in the following chart, those figures suggest that the housing market is still moving sideways:
307,000 single-family homes were under construction at the end of April, essentially unchanged from March. The sudden spurt in housing starts in April was offset by a burst of completions.
In short, little has changed in construction of single-family homes over the past month or, as the chart demonstrates, over the past year. The number of houses under construction has remained remarkably constant over the past 12 months–ranging between 298,000 and 318,000–despite home buyer credits and the upturn of the overall economy.
You forgot something in your calculation, Housing Permits and dropped. It takes 4-6 months to build, and permits need to be applied for being a good forcast indicator. Real estate has a pretty consistent cycle, its always up in the spring. which means you need to look at it in longer trend patterns. Up in Spring and fall, slow in the summer and bad in the winter. the report I saw on CNBC was up in April but permits down more than usual.
Interesting analysis. I am worried by how much cheer leading there is in the general media without a deeper analysis of trends.
More to come from the market in terms of behavior as the tax credit expires. Will consumers continue to buy?
-Irakli
Royal Loan Co.
http://royalloanco.wordpress.com/
Hello,
The home construction rate is rising up to the month of april is a good new but the home construction single family is still flat that is quite disappoiting bexause we deal in construction.Turning house into the ideal home for you and your family is often perceived as a challenging task that we are taking. hope good for future. thanks for giving feagures.
Thanks.