BUILDING PERMITS
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 606,000. This is 11.5 percent (±1.1%) below the revised March rate of 685,000, but is 15.9 percent (±1.3%) above the revised April 2009 estimate of 523,000. Single-family authorizations in April were at a rate of 484,000; this is 10.7 percent (±1.1%) below the revised March figure of 542,000.
Authorizations of units in buildings with five units or more were at a rate of 103,000 in April.
HOUSING STARTS
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 672,000. This is 5.8 percent (±13.0%)* above the revised March estimate of 635 000 and is 40 9 percent (±19 8%) above the revised April 2009 rate of 477 000.
Single-family housing starts in April were at a rate of 593,000; this is 10.2 percent (±10.7%)* above the revised March figure of 538,000. The April rate for units in buildings with five units or more was 68,000.
HOUSING COMPLETIONS
Privately-owned housing completions in April were at a seasonally adjusted annual rate of 769,000. This is 19.2 percent (±13.8%) above the revised March estimate of 645,000, but is 8.7 percent (±12.8%)* below the revised April 2009 rate of 842,000.
Single-family housing completions in April were at a rate of 564,000; this is 14.6 percent (±13.1%) above the revised March figure of 492,000. The April rate for units in buildings with five units or more was 192,000.
The first graph shows the NSA quarterly starts intent for four categories since 1975: single family built for sale, owner built (includes contractor built for owner), starts built for rent, and condos built for sale. Condo starts in Q1 were just above the all time record low last quarter (4,000 vs 3,000 in Q4 2009).Units built for rent set an all time record low in Q1 (19,000 units in Q1 2010 compared to the previous record low of 20,000 units in Q4 2009). This year a record low number of rental units will be built, and that is one reason the rental vacancy rate should continue to decline (household formation should be significantly higher than the increase in housing units in 2010). Owner built units are just above the record low set in Q1 2009 (25,000 units in Q1 2010 compared to 24,000 units in Q1 2009).And the largest category - starts of single family units, built for sale - increased to 86,000 in Q1. With starts so low in every category, the number of units added to the housing stock in 2010 will be at a record low - and that will help reduce the significant excess inventory of housing units.Comparing Housing Starts and New Home Sales Monthly housing starts (even single family starts) cannot be compared directly to new home sales, because the monthly housing starts report from the Census Bureau includes apartments, owner built units and condos that are not included in the new home sales report. However it is possible to compare "Single Family Starts, Built for Sale" to New Home sales on a quarterly basis. This is not perfect because of reporting differences and changes in cancellation rate - but it is close. The quarterly report shows that there were 86,000 single family starts, built for sale, in Q1 2010, and that is the same as the 86,000 new homes sold for the same period. This data is Not Seasonally Adjusted (NSA). This breaks a streak of 9 consecutive quarter with homebuilders selling more homes than they started.Note: new home sales are reported when contracts are signed, so it is appropriate to compare sales to starts (as opposed to completions).This graph provides a quarterly comparison of housing starts and new home sales. In 2005, and most of 2006, starts (blue) were higher than sales (red), and inventories of new homes increased. For the previous 9 quarters, starts were below sales – and new home inventories declined. In Q1 starts and sales were about the same. Historically builders sell more home in Q1 than they start, but they probably started more homes this year anticipating some extra sales in April related to the expiring tax credit.
A start is defined as excavation (ground breaking) for the footings or foundation of a residential structure. For a multifamily structure, all units are counted as started when the structure is started.
- Starts are estimated by the Census Bureau based on a survey of permit holders. Each month, Census Bureau representatives ask holders of outstanding permits whether they have started construction. The same survey also determines whether the home is being built for sale (as a package including land), and if so, whether it has been sold. The Census Bureau continues to contact the permit holders each month until the structure is completed (or if completed but still for-sale, until a sale occurs). For single-family homes, about one in every 50 permits is selected for the survey.
- Although about half of single family homes are started in the same month that the permit is issued, and more than 90 percent are started within 2 months of the month of issuance, the Census Bureau will continue to track unused permits for 60 months. For multifamily units, more than one-third are started in the same month as authorization, and about 80 percent are started within 2 months.
- The “Survey of Construction” forms are filled out by Census Bureau personnel, with most data collected by phone. Construction sites are visited only where the permit holder cannot be contacted or is uncooperative. The survey also collects other characteristics of new homes, such as the size, number of bedrooms, exterior wall material, type of heating system, lot size, estimated current lot value, and sale price.
- Institutional structures and group quarters, such as dormitories, nursing homes, or transient hotels, are excluded.
- For the few places where permits are not required or reported, the Census Bureau sends representatives to a random sample of land parcels, to see whether any homes are being built.
- Single-family structures are distinguished based on information collected in the survey, even if the permit was characterized as multifamily by the permit-issuing jurisdiction.
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