The US Census released the 2nd Quarter report on Housing Units completed. There is a fair amount of attention placed on this report from a National perspective. Calculated Risk did a good job on reporting on the national figures of this report.
I am more interested in our regional activity, this report does not break it down by State but they do break it down by the Midwest region. These figures are the US Census Midwest Region which includes Chicago area.
As you can see on the graph above, there is slight uptick in housing units completed in the Midwest primarily due to Detached Units. The region is still bouncing along the bottom and will likely remain bouncing along the bottom for at least another year. This will not pick up until the employment situation turns around, once the employment situation begins to turn around creating added demand for new housing – construction will pick up adding even more jobs.
Above is the Housing Starts graph. (I forgot to attach this when I originally posted this early today.) This also shows a slight uptick in housing starts, however also bouncing along the bottom… We will be seeing reports on how housing starts are falling, listen for “seasonally adjusted” figures – we are heading into the winter months and starts will naturally slow down. Locally I am anticipating an increase next year in new housing starts assuming our housing inventory stays down and we don’t get swamped with a wave of new foreclosures.
What I found interesting in this report is the Square Footage of the completed housing units. It appears that builders tried reducing the square footage of new homes to get the pricing down, yet it appears the market is still demanding larger homes. I don’t know if you remember hearing all the media attention saying the “era of mcmansions” is over, only in their dreams. The consumer still loves their “elbow room” and space…
There is a demographic shift taking place where household size is shrinking and the expectation is that this demographic will no longer want the large homes. I am not so sure about that… Certainly there will be a need for less expensive housing and that can be achieved through smaller homes, but overall “size matters” in housing.
Builders Association of the Twin Cities, BATC has the Twin Cities Building Permits for July.
- Minneapolis St Paul Building Permits and Housing Starts (craigkamman.wordpress.com)
- U.S. States Where “No One” Wants to Buy a New Home (keatho.wordpress.com)
- July Building Permits and Housing Starts for the Midwest (NAHB and Census Bureau) (craigkamman.wordpress.com)