Housing Market Strength : Single-Family Housing Starts Rise Another 4%

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With respect to housing data, it's the details that matter. Consider last month's Housing Starts report, for example. The headlines tell us Housing Starts were down in December. A closer look, though, tells a different story.

Like everything else in housing of late, the most recent Housing Starts data suggests a housing recovery is well underway.

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The Press Chose The Wrong Housing Start Headline

Each month, the Census Bureau, in cooperation with HUD, tallies Housing Starts for the month prior. A "housing start" is a home on which construction has started (i.e. has "broken ground").

In its Housing Starts report, the government separates data 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 which include apartment buildings and condominiums.

In December, across all 3 property types, Housing Starts fell 4 percent nationwide.

The Housing Starts story was quickly picked up by the press :

• U.S. Housing Starts Fall More Than Forecast (BusinessWeek)
• U.S. Housing Starts Fall (MarketWatch)
• December Housing Starts Are Worse Than Expected (Fox Business)

Now, though factually true, these headlines are misleading. Yes, Housing Starts did fall 4 percent from November to December, but that was for all Housing Starts; for all three property types. As a home buyer, you don't care about all 3 property types.

And this is why the headlines are misleading (and somewhat irrelevant).

Whether you live in Marin County, California; Montgomery County, Maryland; or anywhere else, when you buy or build a new home, the likelihood that you'll buy something other than a single-family home is minuscule. Few buyers nationwide purchase 2-4 unit homes, and almost no one purchases entire apartment building at a time.

This is why, when looking at monthly Housing Starts data, it's the Single-Family Housing Starts data that matters.

Most buyers buy single-family homes.

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Single-Family Starts Climb 4% In December

In December -- for the fourth straight month -- Single-Family Housing Starts increased.

Single-family housing starts rose 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.

April 2010, you'll remember, was the last month of last year's home buyer tax credit; when everyone rushed to bid to homes.

Buyers are buying, and builders are building. The Single-Family Housing Starts data is the latest in a series of housing-related data in support of a housing rebound nationwide. New Home Sales, Existing Home Sales, Pending Home Sales and Homebuilder Confidence has each posted multi-month highs this month and each is poised for strong gains into 2012.

It helps that mortgage rates are low, too.

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Buying Homes This Spring? See Today's Mortgage Rates.

Mortgage rates change daily (and sometimes faster than that), but when you're looking for a home, you need to check your budget.

Start with a mortgage rate quote online. It's quick and free and you'll know for what you can qualify.

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