Reclaiming Common Sense

The February New Home Construction and Sales happened Pre-Wuhan

The February Existing Home Sales Happened Pre-Wuhan


The Legacy Media is hyper-focused on the Wuhan Virus to the detriment of paying attention to the economic news that has been released recently. The Construction sector is mobilizing, as was referenced in the February Jobs Report and the December JOLTS Report. Unemployment claims are down, jobs and wages are up. Full-time jobs are rising. More people are qualifying for mortgages. The Wuhan Virus Mania started well into March. We should continue receiving solid data.It was expected that we could see strong data from the New Construction data, as well as the existing home sales data and the new home sales data.  What happened to the new construction data?


The New Home Starts Data was expected to grow from the January Level and the February 2019 level. The month to month data indicated 71k-78k starts. We had just over 62k starts February 2018. It was expected that, due to the fast start during January that the bounce may only be 62,000 to 66,000 units.


New Home Starts Spiked 39.2% from last February's 54,800 to 75,300 units. This should have garnered some headlines today. This means that we are already ahead of last year's February two month total by 20.52%. Even the trailing 12-month growth rate, or Rolling Year rate, is up 4.52%.  Growth is good.


Units under construction were expected to rise month to month and February to February. Units under Construction have been rising since 2012. Starts lead to units under construction.  Units under construction, depending upon the weather, either are unchanged January to February or rise up to 2%. We had been seeing 10% annual growth in units under construction until the past two years. It was thought that we  could see 3% to 5% growth February to February.or between 1.158 million to 1.180 million units. This seems reasonable. The month to month data projected a range of 1.178 million to up to 1.20 million. A range of 1.18M to 1.19M units under construction was expected this February.


Units Under Construction jumped to 1.195 Million units. This is the highest level of February units since February 2006.This was a 6.32% jump from February last year and 1.31% from January. This topped the expectations.


Completions were expected to have popped, as well. The month to month changes in completions tend to increase through August. The completions data could have spiked 12% to 15% from last February's level. We could and grow up to 2% month to month. The February to February data indicated that we could see 103,000 to 106,000 completions. The month to month data indicated that we could see 94,000 to 96,000 completions. Completions were unchanged from last February, coming in at 91,9000 units. This may be because of the considerable number of starts the past two months.


Best Seasonally adjusted Annual Rates of Starts, Units, and Completions since 2008. The mainstream media loves to discuss the Seasonally Adjusted Annual Rate (SAAR) of Starts, units under construction, and completions. There is "seasonality" in all three measures, with annual peaks at different points during the year. This month we saw our best February SAAR for Starts since February 2007. We saw our best SAAR for Completions since February 2006. We saw our best SAAR for Completions since February 2008. The graphs can be found here.


All real estate is local.  Home prices vary on the sate, county, city, and subdivision in which you live. They vary based on square footage, amenities, and condition. Some are overpriced. Some are "under-priced." Some are priced just right. Some buyers are over-motivated and will pay a higher price for a home than someone else. Some sellers are "under-motivated" and will "wait for their" price, only to have to drop their price every month until a motivated buyer meets the very motivated seller. Contact you local REALTOR or some builders to find out what is available. Contact a lender to be pre-approved for a mortgage.


This data is looking good. It is possible that we may see some sluggishness if the Wuhan Virus Crisis lasts much longer. The thing to remember is that we have had more infections, hospitalizations, and deaths from the annual flu than we have seen from the Wuhan Virus.

  • We have had 36,000,000 cases of flu 370,000 hospitalizations 22,000 flu deaths this year
  • So far, we have had 4,661 cases of the Wuhan Virus and 85 deaths

The Wuhan Virus is a Coronavirus, named for its shape. The common cold is a coronavirus. Unfortunately, viruses normally have to run their course.


It's cold and flu season. It is also that time of year when new homes and for sale signs pop up  like daffodils. The Stock Market is not the Economy. We can expect stronger data for a while, possibly through March. It is possible that the virus will fade within a few weeks and allow April and May real estate activity to bllom, or it may be delayed as it was last year.


It's the Economy.