Monthly and annual progress continues to highlight optimism surrounding the housing market’s recovery. But even such optimism cannot disguise record low construction numbers, according to new data jointly released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).
Privately-owned housing starts in December stood at a seasonally adjusted annual number of 954,000 units, up 12.1% from November, representing a 36.9% increase from December 2011.
In total, last year’s 780,000 housing starts were 28.1% above those in 2011, but despite monthly and annual gains, construction activity continues to remain far below normal national levels.
Between 1990-2011, HUD and the Census Bureau report average housing starts were almost 1.4 million. This data considered, the 780,000 units in 2012 are 43% below the long-term average.
Even with the worst years of 2009-2011 aside, construction starts in 2012 were at their lowest level since the Census Bureau began reporting housing starts, notes the data.
As a result, the rebound has not created new construction jobs, as residential construction fell 1.2% between December 2011 and December 2012. Though, the study does notice a slight uptick toward the very end of last year.
But this still doesn’t hide the 23% decline in construction jobs since December 2008, or the 45% decrease in employment from April 2006, when the study mentions construction was at the peak of its boom.
The low numbers could be a reflection of incomplete projects started in 2012 and even the shift in project designs, as the study notes single-family homes take on average four months to build, while multi-unit projects take a little over a year.
In 2012, 31% of new home starts were in multi-unit buildings, marking the highest share compared to single family units in twenty years. Then, multi-family units accounted for only 20% of construction projects.
New home completions were up 11% in 2012 from 2011, reinforcing the notion that the market is making a recovery, regardless of historical data.
Written by Jason Oliva