Housing Starts Continue Strong

OK, the headlines say that housing starts dropped.  But really, January was abnormally high, thanks to mild weather in much of the country (reversed in February).  The trend looks steady to my eyes:

Permits for new housing construction look steady, so no fall in the coming few months.

But sooner or later, new construction will come down.  I like to look at how much new housing we’ve built relative to our population growth:

Yes, this assumes no change in household size, nor vacation homes, nor demolition (all of which make the "normal demand" understated), but  neither does it count  manufactured homes as "homebuilding."  And manufactured housing is a big part of the new housing supply.  All in all, the "normal demand" is more overstated than understated.

Business implication: if you make your living in the homebuilding or selling industries, get ready for the relatively lean years.  If you sell stuff often bought by new homeowners (furniture, nursery plants), join in the hunkering down.