New Construction Data reminiscent of 1983, 1992, and 2007
The release of the September New Construction data is the first of three very important housing reports for the month of September. The other reports of importance are the New Home Sales data and the Existing Home Sales Data for September. New Home Construction data can be examined at many levels. The most important numbers are the Starts and Completions Data. We have been struggling for years to recover from the Housing Recession that Started after the peak unit sales of 2005 and the peak sales price of 2006.
Single Family Starts are Lower than 1982, 1993, and 2007. The data that is being reported, if it is being reported is the steady increase in Starts data since the bottom of the recession. There really was only one way the data could go when it was at a 34 year low. It had to go upward. We are seeing improvement in the single family starts data. That is true. The problem is that we are seeing fewer starts than we saw during the Septembers between 1992 and 2007. WE lost over 15 years of start growth. We saw a setback of 25 years if you compare 1982 to 2008 data.
This is not a one month exception - We are trending slower than 1982, 1993. and 2007. The Single Family Starts level is being reported at an annual rate of 783,000 units. It is fairly certain that it will fall short of 800,000 units.
The Units Completed Number is trending Lower than1983, 1992, 2007, 2014, and 2015. You may not be hearing this elsewhere. The number of units completed has been bouncing between improvement and contraction this year.
The Cumulative Completions, year to date, is slower than 1983, 1992, and 2007. This is very concerning because when homes are completed people buy furniture, electronic, appliance, carpeting, and everything else they need to decorate a new home. The Realtors are projecting a ate of 951,000 units.
We have more homes under construction than 1988 through 2002. We may have an oversupply of units. If we have an oversupply because these are custom properties then we are okay. If these are speculative units we may be heading towards a correction.
Stay tuned for the existing home sales data and the new home sales data
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