New residential construction spending powered up 3.9% on a seasonally adjusted (SA) basis in October after ascending a healthy 3.1% in September. Not seasonally adjusted (NSA) year-to-date spending was 17.4% higher than a year earlier. Single-family construction spending rose 3.6% in October following the same 3.6% increase for September. Multifamily construction spending rocketed 5.4% after a modest 0.6% advance in September. Year-to-date, single-family construction spending increased 17.3% and multifamily spending increased 17.9% compared to the same period in 2011.
Residential Construction Spending Data | ||||||||
| Monthly Figures (1) (latest actual values) |
3-Month Moving Average | Year-to-Date (NSA) | ||||||
| Aug-12 | Sep-12 | Oct-12 | Aug-12 | Sep-12 | Oct-12 | Jan-11 to Oct-11 |
Jan-12 to Oct-12 |
|
| New Single-family | 131.6 | 136.4 | 141.3 | 128.3 | 131.9 | 136.4 | 90.2 | 105.8 |
| Month-over-Month % Change | 3.1% | 3.6% | 3.6% | 2.6% | 2.8% | 3.4% | ||
| (Year-over-year % change of NSA data) | 20.8% | 25.0% | 29.3% | -5.5% | 17.3% | |||
| New Multifamily (2) | 28.1 | 28.3 | 29.8 | 27.7 | 28.0 | 28.7 | 18.9 | 22.2 |
| 1.4% | 0.6% | 5.4% | 2.2% | 1.0% | 2.5% | |||
| 17.9% | 19.5% | 31.0% | -6.8% | 17.9% | ||||
| New Residential (3) | 159.7 | 164.6 | 171.1 | 156.0 | 159.9 | 165.1 | 109.1 | 128.0 |
| 2.8% | 3.1% | 3.9% | ||||||
| 20.3% | 24.1% | 29.6% | -5.7% | 17.4% | ||||
| Residential Improvements (4) | 129.1 | 127.5 | 129.8 | 126.5 | 127.5 | 128.8 | 96.6 | 105.0 |
| 2.6% | -1.2% | 1.8% | 2.2% | 0.7% | 1.0% | |||
| 17.3% | 13.0% | 13.3% | 1.2% | 8.7% | ||||
| Total Residential (5) | 288.8 | 292.1 | 300.8 | 282.6 | 287.4 | 293.9 | 205.7 | 233.0 |
| 2.7% | 1.2% | 3.0% | 2.4% | 1.7% | 2.3% | |||
| 18.9% | 19.2% | 21.4% | -2.6% | 13.3% | ||||
(1) Monthly levels are seasonally adjusted at annual rates (SAAR figures). | ||||||||
Single-Family Housing
November single-family housing starts fell 4.1% to 565,000 at a seasonally adjusted annual rate (SAAR) from 589,000 starts in October. The pullback was not unexpected given the strong increases in September’s and August’s starts, up 10.6% and 6.3%, respectively.
Single-family building permits slipped a modest 0.2% to 565,000, essentially unchanged from October’s 566,000. Meanwhile, the December NAHB/Wells Fargo Housing Market Index (HMI) posted its eighth consecutive gain, rising 2 points to 47, its highest level since April 2006. Increases in the HMI are closely associated with increases in housing starts one to two months later.
Multifamily Housing
After two months of sharp increases in multifamily starts, they decreased a modest 1.0% to 296,000 (SAAR). Given that multifamily starts tend to vary significantly from month to month, the three-month moving average is used to better gauge multifamily activity. The three-month moving average for November was 288,000, up 10.8% from October and its highest level since August 2008. The average has been above 200,000 starts for over a year. Meanwhile, the three-month moving average of multifamily building permits of 325,000 was also at its highest level since August 2008.
Residential Construction Data | ||||||||||
| Monthly Figures (1) (latest actual values) |
3-Month Moving Average | Year-to-Date (NSA) | Year-to-Date (NSA) | |||||||
| Sep-12 | Oct-12 | Nov-12 | Sep-12 | Oct-12 | Nov-12 | Jan-11 to Oct-11 |
Jan-12 to Oct-12 |
Jan-11 to Nov-11 |
Jan-12 to Nov-12 |
|
| Northeast Starts | 77 | 77 | 73 | 79 | 76 | 76 | 56 | 67 | 63 | 72 |
| Month-over-Month % Change |
4.1% | 0.0% | -5.2% | -0.4% | -3.8% | -0.4% | ||||
| Year-over-year % Change of NSA data |
32.7% | 20.7% | -25.0% | -9.7% | 19.2% | -5.8% | 13.9% | |||
| Midwest Starts | 146 | 153 | 158 | 129 | 143 | 152 | 84 | 104 | 91 | 117 |
| 12.3% | 4.8% | 3.3% | 14.2% | 10.9% | 6.5% | |||||
| 42.1% | 48.0% | 73.6% | -1.5% | 24.1% | -3.0% | 28.0% | ||||
| South Starts | 442 | 445 | 458 | 389 | 421 | 448 | 261 | 337 | 287 | 371 |
| 17.6% | 0.7% | 2.9% | 7.0% | 8.3% | 6.5% | |||||
| 35.7% | 42.7% | 32.3% | 0.2% | 29.2% | 2.4% | 29.5% | ||||
| West Starts | 198 | 213 | 172 | 184 | 194 | 194 | 112 | 149 | 125 | 161 |
| 16.5% | 7.6% | -19.2% | -2.5% | 5.4% | 0.3% | |||||
| 19.9% | 63.2% | -2.4% | 7.2% | 33.1% | 11.9% | 29.5% | ||||
| Total Starts (2) | 863 | 888 | 861 | 780 | 834 | 871 | 513 | 657 | 566 | 722 |
| 15.1% | 2.9% | -3.0% | 4.9% | 6.8% | 4.4% | |||||
| 32.3% | 45.1% | 21.9% | 0.1% | 28.1% | 2.4% | 27.5% | ||||
| Single-family Starts | 595 | 589 | 565 | 546 | 574 | 583 | 367 | 457 | 400 | 497 |
| 10.6% | -1.0% | -4.1% | 4.1% | 5.1% | 1.6% | |||||
| 38.3% | 39.0% | 22.3% | -10.9% | 24.6% | -10.1% | 24.5% | ||||
| Multifamily | 268 | 299 | 296 | 234 | 260 | 288 | 146 | 200 | 167 | 225 |
| 26.4% | 11.6% | -1.0% | 6.8% | 11.0% | 10.8% | |||||
| 21.9% | 58.2% | 21.2% | 44.9% | 36.8% | 53.4% | 34.9% | ||||
| New Home Sales (3) | 369 | 368 | NA | 367 | 368 | NA | 258 | 312 | 281 | NA |
| 0.8% | -0.3% | 0.8% | 0.2% | |||||||
| 20.8% | 16.0% | -7.5% | 20.9% | -6.0% | ||||||
| Manufactured Home Shipments |
47 | 55 | NA | 52 | 53 | NA | 42 | 47 | 48 | NA |
| -18.4% | 17.7% | -2.6% | 2.7% | |||||||
| -13.1% | -5.4% | -3.1% | 10.7% | 1.1% | ||||||
Housing starts, home sales, and manufactured home shipments are all in thousands. | ||||||||||
Outlook for Residential Construction
The outlook for the housing market and consequently for residential construction remains positive. The foreclosure problem is slowly receding. Single-family housing prices are increasing in numerous markets. Rental vacancy rates are falling and rents are rising. Mortgage rates hover near historic lows. The Federal Reserve has stated its intent to continue purchasing mortgage-backed securities. Financial institutions are showing a greater willingness to lend to homebuyers and to builders.
The new residential construction spending forecast is for an increase of 19.4% in 2012, 22.5% in 2013, and 15.4% in 2014.
Residential Construction Data |
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| Actual | Forecast | |||||
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
| Northeast Starts | 62 | 72 | 68 | 78 | 91 | 107 |
| (Year-over-year % change of NSA data) | -48.9% | 15.9% | -5.4% | 14.7% | 16.5% | 18.2% |
| Midwest Starts | 97 | 98 | 101 | 126 | 165 | 176 |
| -28.0% | 0.8% | 3.1% | 25.0% | 30.9% | 6.8% | |
| South Starts | 278 | 298 | 308 | 403 | 471 | 526 |
| -38.6% | 6.9% | 3.5% | 30.8% | 16.9% | 11.8% | |
| West Starts | 117 | 120 | 133 | 172 | 223 | 288 |
| -40.5% | 2.7% | 10.5% | 29.6% | 29.8% | 29.3% | |
| Total Starts (1) | 554 | 587 | 609 | 778 | 949 | 1,098 |
| -38.8% | 5.9% | 3.7% | 27.8% | 22.0% | 15.7% | |
| Single-family Starts | 445 | 471 | 431 | 533 | 627 | 731 |
| -61.6% | 6.2% | 54.0% | 37.6% | 31.3% | 13.9% | |
| Multifamily Starts | 109 | 116 | 178 | 245 | 322 | 367 |
| -28.4% | 5.9% | -8.6% | 23.7% | 17.7% | 16.6% | |
| New Home Sales (2) | 375 | 323 | 306 | 364 | 420 | 513 |
| -22.7% | -13.9% | -5.3% | 19.0% | 15.3% | 22.0% | |
| Manufactured Home Shipments | 50 | 50 | 52 | 55 | 62 | 70 |
| -39.2% | 0.5% | 3.1% | 7.2% | 11.6% | 13.4% | |
| Residential Construction Spending (Billions of Current Dollars) | ||||||
| New Single-family | 105.3 | 112.6 | 108.2 | 129.1 | 158.0 | 182.8 |
| -43.3% | 6.9% | -3.9% | 19.3% | 22.4% | 15.7% | |
| New Multifamily (3) | 35.9 | 24.1 | 22.6 | 27.1 | 33.3 | 38.0 |
| -30.0% | -32.9% | -6.0% | 19.8% | 22.7% | 14.1% | |
| New Residential (4) | 141.2 | 136.7 | 130.8 | 156.2 | 191.3 | 220.7 |
| -40.4% | -3.2% | -4.3% | 19.4% | 22.5% | 15.4% | |
| Residential Improvements (5) | 112.7 | 112.5 | 114.9 | 123.6 | 134.2 | 145.0 |
| -6.6% | -0.2% | 2.2% | 7.6% | 8.6% | 8.0% | |
| Total Residential (6) | 253.9 | 249.1 | 245.7 | 279.8 | 325.5 | 365.7 |
| -29.0% | -1.9% | -1.4% | 13.9% | 16.3% | 12.3% | |
Housing starts, home sales, and manufactured home shipments are all in thousands. |
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Read more forecasts from Reed Construction Data:
Construction Spending Gains Strength in October
Nonresidential Building Construction Spending Rebounds in October
Heavy Engineering Construction Spending Edged Higher in October
