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It was recently reported that November housing starts rose month-to-month by 8.9%.  October’s starts were revised so as to show a 10.1% decline, after initially having been reported down by 10.6%. The year-to-year change was down by 12.4% in November, following a revised annual contraction of 30.9% in October.   

As seen in the chart below, since December 2008, housing starts have been bouncing along the bottom at historically low levels.  In November housing starts were reported at 574,000 versus the 3-month moving average of 564,000.  Over the past 6 months housing starts have averaged 576,000.  Since June 2009, all monthly readings have been within the normal range of monthly volatility around the 6 month average. 

To describe the housing market in a "recovery" phase based on housing starts is a slight over statement.  No matter how you look at it, housing starts remain well below any levels seen since the end of World War II.

Howard Penney

Managing Director

HOUSING – A Bottoming Process - starts1

HOUSING – A Bottoming Process - starts2