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Don’t Worry About the January New Construction Data
Jonathan Smoke / BUILDER / February 20, 2013
Metrostudy boots-on-the-ground evidence shows widely distributed recovery
The Commerce Department released the initial reading on housing starts in January and the 890,000 number represented a decline of 8.5% over December’s revised number of 973,000. As we typically see, the December number was revised up (from 954,000). The January change was within the margin of error, so statistically the initial January ready was meaningless as it often is. The decline in the SAAR rate was entirely caused by a statistically significant decline in multifamily starts. Meanwhile, single family starts registered the highest SAAR rate since August 2008 (after December’s initial reading was revised down).
So what can we gather from the monthly survey based data? We know that starts are up significantly year over year. Also, it looks as though single family is strengthening while multifamily is slowing down.
Contrast that with the numbers that Metrostudy collects each quarter by driving 30,000 new home subdivisions and counting lots, starts, inventory, and closings. This data is not subject to wild revisions or broad confidence intervals, and it paints a clear picture of broad recovery clearly taking root around the country.