A “housing start” is a new housing unit for which construction has begun. The graph above shows monthly housings starts in the U.S. for the past 20 years (Nov 1998 to Nov 2018) separated into three groups: single-family houses, houses with two to four units, and houses with five or more units. Note that this statistic pertains to the number of housing units and not number of houses/buildings.
The graph shows that housing starts dropped during the past recession and then increased again. That’s no surprise. However, single-unit starts have not reached their pre-recession levels. Initially, the reason was thought to be that households were either finding it more difficult to access mortgages or getting cold feet when considering the potential pitfalls of homeownership, such as the large number of foreclosures during the recession. Now, ten years after the recession, we may have to find another explanation for this change, which appears to be more than just transitory.*
Even if it doesn’t provide a definitive explanation, the graph below makes it easier to see this change by showing the percentages of the total number of units started.
*Maybe the new generation is less interested in single-family homes in the suburbs, which would be consistent with the decline in driving that we observed in a recent blog post.
How these graphs were created: For the first graph, search for “housing starts” and you should find all the seasonally adjusted series on the first page of results. Select them and click “Add to Graph.” For the second graph, take the first, go to the “Edit Graph” panel’s “Format” tab, and select graph type “Area” with stacking “Percentage.”
Suggested by Christian Zimmermann.
View on FRED, series used in this post: