Behind the Housing Starts Headlines: The Story That Matters

When it comes to housing data, sometimes you have to look past the headlines. December's Housing Starts data offers a terrific illustration of why. Each month, the Census Bureau tallies Housing Starts for the month prior. A "housing start" is a home on which construction has started. The Housing Starts report is separated by property type. There is a count for single-family homes; a count for 2-4 unit homes; and a count for buildings of 5 units or more, a category including apartments and condominiums. In December, as reported by the government, Housing Starts [fell 4 percent](http://www.census.gov/construction/nrc/pdf/newresconst.pdf "Housing Starts Data") nationwide overall. This runs contrary to recent strength in housing and the story was quickly picked up by the press : - U.S. Housing Starts Fall More Than Forecast ([BusinessWeek](http://www.businessweek.com/news/2012-01-19/u-s-housing-starts-dropped-more-than-forecast-in-december.html "Housing Starts story")) - U.S. Housing Starts Fall ([MarketWatch](http://www.marketwatch.com/story/us-housing-starts-fall-41-in-december-2012-01-19?dist=beforebell "Housing Starts on MarketWatch")) - December Housing Starts Are Worse Than Expected ([Fox Business](http://www.foxbusiness.com/news/2012/01/19/us-december-housing-starts-are-worse-than-expected/ "Housing Starts on Fox")) Now, although these headlines are factually true, they're also are a little bit misleading. Housing Starts did fall 4 percent last month but that was for _all_ Housing Starts, across all three property types. Data like this is somewhat irrelevant to home buyers in TN or anywhere else nationwide. Few buyers purchase 2-4 unit homes, and almost nobody purchases an entire apartment building. Rather, it's the Housing Starts reports' "single-family" tally that matters because that's the home type that the majority of home buyers purchase. In December, for the fourth straight month, Single-Family Housing Starts increased. Single-family housing starts climbed 4 percent last month to 470,000 units on a seasonally-adjusted, annualized basis. This is the highest number of Single-Family Housing Starts since April 2010 -- the last month of last year's home buyer tax credit. The Single-Family Housing Starts data is the latest in a series of data that point to a housing rebound nationwide. New Home Sales, Existing Home Sales, Pending Home Sales and Homebuilder Confidence has each posted multi-month highs and all are poised for strong gains into 2012. If you're planning to buy a home in 2012, consider buying in between now and March rather than at some point later. Home prices -- and mortgage rates- are likely to move higher.