People focus a lot on the month-to-month changes in housing starts. This month’s starts, for example, were below expectations and generally disappointed people. But consider the long-term view, as we recently down on the Bespoke Investment Group blog. The data show that housing is a long way from being even average for the post-war period.
So how does the current level of starts compare to history? The chart below shows the historical monthly Housing Starts report going back to 1959. At this month’s level of 1.215 mln on a seasonally adjusted rate, Housing Starts are still more than 200K below their historical average going back to 1959, and haven’t seen even an average monthly reading once during the current expansion. The closest we came to average was last October when the SAAR monthly reading hit 1.32 million. What’s even more startling about this lack of a single ‘average’ monthly reading is that it doesn’t even account for the increase in population during this period. Decades ago, Housing Starts were routinely in the 1.5 million range even when the US population was not much more than half of the size that it is now.