Housing Starts Ease 0.7 Percent In June — 7x Better Than The Headline Data
Single-family Housing Starts eased lower last month, falling by 0.7 percent from May, or 3,000 units nationwide.
A “housing start” is a home on which construction has started.
June’s Housing Starts data is somewhat soft and may partially explain why home builder confidence dropped to its lowest level since April 2009, but for buyers and sellers , the Housing Starts report is not nearly as bad as headlines say.
This is because when the press reports on Housing Starts, it doesn’t single out single-family homes. The press lumps every type of home into a single, giant reading. As a result, news outlets are reporting Housing Starts down 5 percent — a somewhat misleading figure.
The 5 percent figure is actually a combination of 3 separate housing types:
- Single-Family Housing Starts
- Multi-Unit Housing Starts (2-4 Units)
- Apartment Building Housing Starts (5 or more units)
But, single-family homes are what most Americans purchase. This is why the single-family starts data is more relevant than the combined figure commonly reported by the press. 2-4 units and apartment buildings are a different realm of buyer.
That said, though, we can’t even be sure that June’s Single-Family Housing Starts report is accurate. As noted in the Department of Commerce’s press release, the data’s margin of error is 10.7 percent which means the reported results are of “no confidence”.
In other words, there is no statistical evidence to prove the actual change was different from zero.
If Housing Starts did, in fact, drop in June, it will help to reduce the housing inventory, which will provide support for local home values. For home sellers, this could be good news. Fewer homes for sale means less competition for buyers.
Related posts:
- Housing Starts Data Much Better Than The Headlines Would Have You Believe
- Single-Family Housing Starts Hold Steady For The 8th Straight Month
- Housing Starts Rise In November, But With A High Margin Of Error
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
