Total housing starts in April were below expectations, however revisions to prior months were positive.
The housing starts report showed starts were down 30.2% in April compared to March, and starts were down 29.7% year-over-year compared to April 2019.
Single family starts were down 24.8% year-over-year, and multi-family starts were down 40.2% YoY.
This first graph shows the month to month comparison for total starts between 2019 (blue) and 2020 (red).
Starts were down 29.7% in April compared to April 2019.
Last year, in 2019, starts picked up in the 2nd half of the year, so the comparisons are easy early in the year.
Starts, year-to-date, are still up 3.7% compared to the same period in 2019.
Starts will be down YoY for at least the next few months due to the impact from COVID-19.
Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).
These graphs use a 12 month rolling total for NSA starts and completions.
The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession – then mostly moved sideways. Completions (red line) had lagged behind – then completions caught up with starts- although starts picked up a little again lately.
The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion – so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.
Note the relatively low level of single family starts and completions. The “wide bottom” was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions once the crisis abates.