Submitted by dpedigo on Thu, 08/19/2010 - 7:37am

Now that we are solidly beyond the half-way mark of 2010, I decided to go through the housing start numbers over the last 5 years. This data, based on quarterly data provided by the US Census bureau shows that we are making a slow, but measurable increase in the number of housing starts in the US (see figure 1). While we are nowhere near 2005 production (2009 was 74.1% lower in housing starts over the peak year production of 2005 - see figure 2). However the percentage change from 2nd quarter 2009 to 2010 is up 14.5%, and that should be encouraging to all.

Figure 1: Housing Starts by Quarter 2005-Present

Source: http://www.census.gov/const/www/newresconstindex.html

One way to be optimistic is based on the natural increase in population. At some point those entering the job market should drive the housing market back. Take employment rates vs. population growth, according to the Bureau of Labor statistics, the economy must increase the number of jobs by 150,000 per month just to meet population demands. Thus, when the jobs market springs back (that is the big if and when), there should be a significant increase in the housing market. We are already seeing some spring back in some area's particularly the south.

Figure 2: Housing Starts By Year 2005 - Present

Source: http://www.census.gov/const/www/newresconstindex.html

Based on the numbers (see figure 3), all areas are showing some signs of growth, but the south has the highest amount of increase in the last six months. This was also by far the most affected area of the country, so it is reasonable to expect that it would also  be the quickest to make a rebound. To conclude, by looking at the figures, it may be reasonable to conclude that the housing market is past its deepest valley and the worst of it is behind us (of course, no garuantees)

 

Figure 3: Housing Starts By Region 2005 - Present

 Now that we are solidly beyond the half-way mark of 2010, I decided to go through the housing start numbers over the last 5 years. This data, based on quarterly data provided by the US Census bureau shows that we are making a slow, but measurable increase in the number of housing starts in the US (see figure 1). While we are nowhere near 2005 production (2009 was 74.1% lower in housing starts over the peak year production of 2005 - see figure 2). However the percentage change from 2nd quarter 2009 to 2010 is up 14.5%, and that should be encouraging to all.