by Nick Timiraos
The Wall Street Journal
Housing construction ended 2012 on a high note, with new
units in December rising 12% from November and 37% from a year ago.
The boom in construction shouldn’t be too surprising, given
that permits have risen in recent months and that builder confidence has risen.
But it is a clear indication that rising household formation and sharp drops in
the number of homes for sale are finally benefitting home builders. Five facts
help to put today’s report in context:
1. Multifamily housing starts accounted for the
highest share of overall housing starts, at 30%, since 1986, when the
experienced overbuilding in the apartment sector. Of course, back then, there
were more than double the number of apartments being constructed. (The
multifamily share of construction fell to just 15% in 2005, the peak year of
new home construction).
2. Multifamily construction in 2012 was more than
double the rate of 2009 and 2010 combined, at 233,400 units. But that was still
lower than any year between 1995 and 2008.
3. Single-family housing starts ended the year at
535,500, which is the fourth lowest since record keeping began in 1959, but a
hefty 24% above last year’s level, which was the lowest on record. In other
words, construction is very low, but it is beginning to pick up the pace.
4. December’s rate of new construction, which hit a
seasonally adjusted annual level of 954,000 total units and 616,000
single-family units, stood at the highest level in 4½ years. Still, the
single-family starts figure was below that of every month between June 1982 and
June 2008.
5. New housing unit completions are up only 11%
from 2011, notes Jed Kolko, chief economist at Trulia, which is below the 28%
gain in new construction starts. “That means many of the homes started in 2012
won’t be completed until 2013,”
