The residential construction market continues to struggle from the effects of:
The result has been housing starts, despite monthly variability, largely in a holding pattern. Although housing starts remain at very low levels—barely enough to replace the depreciation and loss (damage from fire, flood, earthquake, etc.) from the existing stock of houses, they are above the even lower levels from two years ago.
What little evidence of improvement in residential construction has come from multifamily projects. Declining vacancy rates have contributed to rising rents, which has bolstered the interest in investing in multifamily rental projects. Multifamily starts will continue to rise with employment gains, which will boost occupancy rates, allowing for rent increases. The Fed’s Operation Twist, by lowering long-term rates, will increase the desirability of multifamily projects.
The forecast is for residential construction spending to fall 6.5% in 2011 and then rise 1.3% in 2012 and 7.2% in 2013.
U.S. Residential Building Construction | ||||||||||
| Monthly Figures (1) (latest actual values) |
Annual Figures | |||||||||
| Actual | Forecast | |||||||||
| Jun-11 | Jul-11 | Aug-11 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Northeast Starts | 72 | 86 | 61 | 143 | 121 | 62 | 71 | 73 | 65 | 81 |
| (Year-over-year % change of NSA data) | 10.9% | 13.9% | -17.4% | -14.5% | -15.4% | -48.8% | 15.2% | 2.4% | -11.0% | 24.6% |
| Midwest Starts | 122 | 78 | 80 | 210 | 135 | 97 | 98 | 86 | 77 | 92 |
| (Year-over-year % change of NSA data) | 39.6% | -15.1% | -28.2% | -24.9% | -35.8% | -28.0% | 0.8% | -12.1% | -10.5% | 19.5% |
| South Starts | 287 | 302 | 292 | 681 | 453 | 278 | 297 | 291 | 273 | 301 |
| (Year-over-year % change of NSA data) | -0.7% | 10.5% | 4.0% | -25.2% | -33.4% | -38.7% | 6.9% | -2.2% | -6.2% | 10.3% |
| West Starts | 132 | 135 | 138 | 321 | 196 | 117 | 120 | 123 | 112 | 132 |
| (Year-over-year % change of NSA data) | 20.4% | 25.5% | 0.0% | -27.7% | -38.8% | -40.4% | 2.7% | 2.5% | -8.9% | 17.9% |
| Total Starts | 613 | 601 | 571 | 1355 | 905 | 554 | 587 | 573 | 527 | 606 |
| (Year-over-year % change of NSA data) | 11.7% | 9.1% | -5.9% | -24.8% | -33.2% | -38.8% | 6.0% | -2.4% | -8.0% | 15.0% |
| Total Single-family Starts | 447 | 423 | 417 | 1046 | 622 | 445 | 471 | 417 | 403 | 451 |
| (Year-over-year % change of NSA data) | -2.0% | -1.5% | -2.0% | -28.6% | -40.5% | -28.5% | 5.9% | -11.5% | -3.4% | 11.9% |
| Total Multifamily Starts | 166 | 178 | 154 | 309 | 283 | 109 | 116 | 156 | 124 | 155 |
| (Year-over-year % change of NSA data) | 86.7% | 49.1% | -14.5% | -7.9% | -8.3% | -61.6% | 6.3% | 34.7% | -20.5% | 25.0% |
| New Home Sales (2) | 303 | 302 | 295 | 776 | 485 | 374 | 322 | 295 | 283 | 317 |
| (Year-over-year % change of NSA data) | 0.0% | 7.7% | 13.0% | -26.2% | -37.5% | -22.9% | -13.9% | -8.4% | -4.1% | 12.0% |
| Manufactured Home Shipments | 53 | 44 | NA | 96 | 82 | 50 | 50 | 47 | 45 | 49 |
| (Year-over-year % change of NSA data) | -7.7% | -13.8% | -18.4% | -14.5% | -39.3% | 0.7% | -6.1% | -4.3% | 8.9% | |
| Residential Construction Spending New Residential (Billions Current $) |
126.2 | 125.9 | NA | 354.1 | 237.0 | 141.2 | 136.2 | 127.4 | 129.0 | 138.2 |
| (Year-over-year % change of NSA data) | -10.8% | -9.3% | -24.5% | -33.1% | -40.4% | -3.5% | -6.5% | 1.3% | 7.2% | |
| Residential Improvements* (Billions Current $) | 133.7 | 129.9 | NA | 139.5 | 120.7 | 112.7 | 112.5 | 119.8 | 123.3 | 128.8 |
| (Year-over-year % change of NSA data) | 22.8% | 19.3% | -3.9% | -13.5% | -6.6% | -0.2% | 6.5% | 2.9% | 4.5% | |
Housing starts, home sales, and manufactured home shipments are all in thousands | ||||||||||
