Economic Snapshot: Housing starts continue double-digit YOY growth

Both privately owned housing starts and housing completions posted double-digit gains in February, indicating long-term growth for the housing market.

Housing starts

Privately owned housing starts were at a seasonally adjusted annual rate of 1,178,000 in February. This is 5.2 percent above the revised January estimate of 1,120,000 and 30.9 percent above the February 2015 rate of 900,000.

Single-family housing starts were at a rate of 822,000 in February. This is 7.2 percent above the revised January figure of 767,000.

Privately owned housing completions were at a seasonally adjusted annual rate of 1,016,000 in February. This is 4.2 percent below the revised January estimate of 1,060,000 but is 17.5 percent above the February 2015 rate of 865,000.

Single-family housing completions were at a rate of 736,000 in February. This is 6.1 percent above the revised January rate of 694,000.

Housing Market Index

Builder confidence was unchanged at a level of 58 in March.

“Confidence levels are hovering above the 50-point mid-range, indicating that the single-family market continues to make slow but steady progress,” said NAHB Chairman Ed Brady, a homebuilder and developer from Bloomington, Ill. “However, builders continue to report problems regarding a shortage of lots and labor.”

The HMI component gauging current sales conditions held steady at 65 in March. The index measuring sales expectations in the next six months fell three points to 61. The component charting buyer traffic rose four points to 43.

“While builder sentiment has been relatively flat for the last few months, the March HMI reading correlates with NAHB’s forecast of a steady firming of the single-family sector in 2016,” said NAHB Chief Economist David Crowe. “Solid job growth, low mortgage rates and improving mortgage availability will help keep the housing market on a gradual upward trajectory in the coming months.”

Looking at the three-month moving averages for regional HMI scores, the Midwest posted a one-point gain to 58 and the South was unchanged at 59. The West declined three points to 69 and the Northeast dropped one point to 46.