The Commerce Department released first-quarter data this morning for housing starts, permits, and completions including April readings. Jonathan Smoke, chief economist at Hanley Wood, and Brad Hunter, chief economist at Metrostudy offer market insight on the growth in single-family starts and concentration in multifamily construction in 2014 based on government and Metrostudy data.
“Metrostudy’s new field study (350 researchers drive nearly 500,000 miles every 90 days, counting all lots, starts, and units of new-home inventory) is revealing some interesting trends and turning points. Detached single-family housing starts rose by 5% comparing the first quarter of 2014 with the previous quarter, and were up by 9% compared with a year ago,” highlights Hunter.
Smoke explains the first-quarter data stating, “in the detailed quarterly permit data from the Census, all of the top 15 markets experienced growth in their three-month moving averages. Tampa was the growth leader with a 16% increase, followed by Atlanta at 14%, then Dallas and Charlotte both at 13%. Over half of the volume leaders had double-digit increases for their moving averages with five of those also showing double-digit increases from one year ago. Across all of the top fifteen for year-over-year growth, more than half also saw increases with Orlando leading at 51% over March 2013 and Chicago at 44%. Both of those markets showed a more modest 5% jump in the moving averages but significantly outperformed monthly permits in the prior year. Of the seven markets with decreases, the largest was seen in Phoenix with an 18% drop followed by Raleigh at 14%.”
Smoke also highlights continued concentration of multifamily permits with 5% of MSAs making up 80% of permits for the month of March and 7% accounting for 80% of the annual volume for the most recent twelve-month period.