Housing Starts Data

I know, I know. I say I don’t like to talk about housing and here is another post about housing. One of the reasons I dislike talking about housing is that so little of the debate is grounded in any fundamentals. It is a discussion of one person’s opinion about what should happen or how the world should be versus that of another. The one thing these people usually agree about is they don’t like my opinion. C’est la vie. Moving on…

The housing starts report came out today (available here) and the headline number got a great deal of attention. Housing starts were down 8.8% in March compared to February and this got a great deal of attention. Why? For the most part nobody saw it coming and, in general, starts are thought to be a pretty decent indicator of future economic activity. I am a little puzzled by the fact that nobody I heard mentioned that starts are 14.2% above the March level from a year ago. That would seem to be a good sign, and that maybe there were some changes in how builders planned out the year.

Building permits and housing completions were also up compared to a year ago as well. Completions were up over 30% according to the report. So some good, some maybe not so good, but really confusing why people focused on this data point as being bad. So why do I mention it here?

Well, since the ongoing question seems to be the issue of affordable housing, and my post yesterday referenced an article that talked about new housing unit construction as one path to increasing affordable housing, it would seem that concerns about housing starts would be a potential problem. However, as I mention, as I delved into the data I am not sure why there was such a level of concern this morning.

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