Steel Products
August 19, 2013
Housing Permits & New Construction Starts: An Analysis
Written by Peter Wright
As reported by Sandy Williams here in the Steel Market Update on Friday, the National Association of Home Builders index reached its highest level in almost eight years in July but the Census Bureau construction starts data is not so encouraging. On a year over year basis the 3-month moving average (3MMA) of both permits and starts are still growing strongly at 17.1 percent and 20.5 percent respectively but growth has slowed compared to last year and on a monthly basis the growth of total starts has been negative for three of the last four months.
Figure 1 shows starts on a 3MMA basis for single and multi-family units. The trajectory that had been evident for two years has changed dramatically. Regionally the South has seen the greatest decline (Figure 2). It will take a few more months to determine whether this is a correction or a new trend.
