Steel Markets
March 19, 2014
Housing Starts and Permits in February 2014
Written by Peter Wright
In February total building permits exceeded total starts by 38,000 units which would seem at first glance to be a good sign. However digging down into the data reveals a much more complex situation in this market. The two sub sectors, single and multi-family units are behaving differently. Single family permits were 12,000 less than starts, suggesting a slowing in this sub sector as multifamily permits exceeded starts by 50,000 units suggesting an acceleration of apartment construction. In February on a three month moving average (3MMA) basis the ratio of single family to multifamily starts fell below 2 for the first time since June 1986 (Figure 1). This ratio is now well below the long term trend line and is falling indicating a medium term shift that will likely not recover in this decade.
