KEY MARKET INDICATORS as of Mar 19, 2018
February Housing Starts
Housing starts decreased 7% m/m to a seasonally adjusted annual rate of 1.236 million units in February. The decline was driven by a 26% m/m decline in the multi-family segment. Single-family housing starts continued to grow, increasing by 2.9% m/m to 902,000 units – the second highest monthly number since October 2007. Beyond volatility over the last two months, we expect multi-family housing starts to be
flat this year. Since the skills required in single- and multi-family construction are similar, most new construction workers entering the industry will likely enter the single-family segment, which is good news for the segment. We expect single-family housing starts to reach 920,000 units this year, an 8% increase from 2017. The increase in single-family housing starts is unlikely to be enough to meet rising demand, which means that home price should continue to rise. Homes at the lower end, which is more affordable to first-time homebuyers, will likely outperform. The Case-Shiller Home Price Index divides homes into low, middle, and high prices. In the past 12 months, homes in the low-price segment out-performed the overall index by 4 percentage points, meaning that prices were growing at close to 10% annually.
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