Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Housing Starts Increased 6.8% in February
Posted Under: Data Watch • Employment • Home Starts • Housing
Supporting Image for Blog Post

 
Implications:  After unusually cold weather and rising COVID cases held home building back in January, new home construction rebounded in February, posting the fourth gain in the past five months to hit the fastest pace in nearly sixteen years. Looking at the details of the report, both single and multi-family construction contributed to the headline gain of 6.8%. Notably, multi-family construction is up 46.6% in the past year, outpacing the 13.7% gain for single-family homes. It looks like developers have been shifting resources toward apartment buildings in response to rapidly rising rents and people moving back into big cities as pandemic-era restrictions are removed.  Zillow estimates that rental costs for new tenants are up 17.0% in the year ending February 2022 while Apartmentlist.com estimates they have risen 17.6% over the same period, easily exceeding typical gains in the 3.0–4.0% range. Recent distributional effects aside, housing construction remains healthy, with the number of homes under construction at the highest level since 1973, a testament to not only high housing demand but also a slower construction process due to a lack of workers.  In addition, builders still have a huge number of permitted projects sitting in the pipeline waiting to be started.  In fact, the backlog of projects that have been authorized but not yet started is currently the highest since the series began back in 1999.  Given this context, it's not surprising that permits for new building projects fell 1.9% in February. With plenty of future building activity in the pipeline, builders looking to boost the near record-low levels of inventory to satisfy buyers, and as more Millennials finally enter the housing market, it looks very likely construction will continue its upward trend.  Keep in mind the US needs roughly 1.5 million housing starts per year based on population growth and scrappage (voluntary knockdowns, natural disasters, etc.), and 2021 was the first year in the aftermath of the 2008/9 recession that has crossed that threshold. We currently expect 2022 to exceed that benchmark as well.  In other recent housing news, the NAHB Housing Index, which measures homebuilder sentiment, declined slightly to 79 in March from 81 in February.  While this is the lowest reading in six months, it's important to remember that these readings remain near historical highs, still signaling robust optimism from developers.  In employment news this morning, initial unemployment claims declined 15,000 last week to 214,000.  Meanwhile, continuing claims fell 71,000 to 1.419 million, a new post-pandemic era low. 

Click here for a PDF version
Posted on Thursday, March 17, 2022 @ 10:44 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Powell Channels Volcker
Retail Sales Rose 0.3% in February
The Producer Price Index (PPI) rose 0.8% in February
It’s the Money
Recovery Tracker 3/11/2022
The Consumer Price Index (CPI) Increased 0.8% in February
The Trade Deficit Grew to $89.7 Billion in January
Will Russian Sanctions Lead China to Sell US Debt?
Final COVID-19 Tracker 3/4/2022
Recovery Tracker 3/4/2022
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.