Housing had a good month in April. But the "new normal" continues to underperform and is another element of this slow-growth recovery.
Housing starts rose nationally 6.6 percent in April compared with the previous month. The annual rate of 1.172 million is 1.7 percent below the same month in 2015, according to the Census Bureau.
In recent months, starts have posted some of their best numbers since the Great Recession. But they are far below previous post-World War II expansions. For example, starts were near 2.5 million a month in the early 1970s and were usually above 1.5 million in the 1990s.
They took off in the 2000s, but this time the numbers were goosed by the subprime hustle. It’s important to remember that historically, without the bankster rackets, housing was one of the major drivers of the economy.
Official data for metropolitan areas trails by a month. In March, Seattle-Tacoma-Bellevue added 921 private housing units. That’s a post-recession high. But, as the chart above shows, it is well below the growth of pre-recession years. Another 1,833 building permits were issued, down from 2,125 in the same month last year.
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The reasons behind the national numbers are fairly clear: continued high inventory, tougher lending standards, stagnant incomes for many and millennials not buying houses at the same rate as previous generations.
Here, the picture is more murky. Some would argue that urban growth boundaries need to be expanded, but there’s plenty of land where houses can be built. But the most desirable areas are resistant to more density or even changing zoning. So even through demand exists and the region is growing, the market is encountering barriers.
On the plus side, the metro area saw 110,700 employed in construction in March. That’s a new post-recession high compared with a June 2011 trough of 78,900. That compares favorably with previous years, aside from the months running up to the 2008 bubble collapse. Of course, this includes everybody from those working on office towers to the necromancers of Bertha.
It may be a long time before housing, especially the single-family variety, regains its previous power. But it does continue to heal — coming out of the worst hole since the Great Depression.
Today’s Econ Haiku:
Hillary says Bill
Might help with economics
That will Bern critics