Article source: ConstructConnect

Since the Spring of last year, monthly total U.S. housing starts (annualized) have been on a downwards trajectory. The weakness in housing starts is one of the chief arguments for speculation that a recession is just around the corner.

Furthermore, the number of residential building permits, which is a leading indicator (by a month of two) for ‘starts’ is showing no signs of bottoming just yet. A key question, therefore, is when will the slide end?

Cluster Chart 1 shows that, in nearly every region, permits issued for single-family structures are the main, and in most cases sole, cause of the overall tapering off. Only in the Northeast are multiples showing a greater degree of settling down than singles. But it’s also true that only in the NE are multiples, in units, routinely a higher proportion of the total than singles.

What’s also the case, though, is that an interesting shift is underway. In the three other regions than the NE, the drops in single-family units, with accompanying relative stability in multi-family units, is leading to convergence. This is a situation that is not in keeping with historical data for the U.S. Throughout the decades, and for a variety of reasons, U.S. single-family starts have placed well above multi-family starts (both in units) as a proportion of total.
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