The vertical bars in Chart 1 show the history of housing construction in the United States. The monthly number of actual innovations in units is seasonally adjusted year on year (SAAR). "Annual" means that they are forecasted from one month to 12 months.
Chart 1 for the US housing market shows that starting from last April, starts continued to rise almost every subsequent period until the end of 2020.
However, in 2021, the height of the vertical stripes has remained about the same. The March 1.725 million units (SAAR) alone makes a strong impression. Levels in the other nine months of this year ranged from 1.45 million to 1.65 million units. U.S. housing construction volumes remained strong in 2021, but growth has weakened.
Chart 2 clearly shows that it was the US single-family home market that was in decline. From 2015 to the end of 2020 (and barring the coronavirus-related downturn in the spring of 2020), singles starts have been on a strong upward trajectory. In 2021, they mostly rolled down, albeit unevenly.
One handy way to look at launches is to compare the January-October monthly averages (based on SAAR data) for 2021 with the January-October 2020 results. Based on this, "total" this year was +16.3%, with single +16.8% and multiple +15.0%. Regionally, it was the Northeast with +29.0%, followed by the West with +18.8%; South, +14.6%; and the Midwest, +10.8%.
2020 compared to long term
But the “bigger picture” is revealed when 2021 results are compared to annual averages for all of the previous 21 years of this century (that is, from 2000 to 2020 inclusive).
The average monthly number of new buildings on an annualized basis in 2021 is still +24% compared to the annual average for the period from 2000 to 2020. The number of new buildings per family is +16% compared to their long-term average. Multi-family starts are much better +48%.
The apartment and condominium portion of the market is expanding faster than the detached, semi-detached and townhouse portion, but it still accounts for only a relatively small share of total new builds at 30%. (Townhouses are considered "single" if the apartment buildings do not have shared HVAC systems.)
Regionally, launches in the Northeast this year may be the most compared to last year, +29.0%, but compared to their long-term annual average, they are only +13%.
But it's better than starts in the Midwest, which are slightly worse than stable (-2%) compared to the annual average from 2000 to 2020.
The movement of population in the country over the past decades has been in favor of the Southern and Western regions, and it is there that housing construction has shown the greatest strength.
Compared to its long-term (2000 to 2020) annual average, the West currently has +27% new builds.
Best of all, however, is the South, outperforming it by a third (+34%).
Chart 1: Total U.S. Housing Starts at
Seasonally Adjusted Annual Rates (SAAR)
The latest data refers to October 2021.
Data Source: US Census Bureau (Department of Commerce).
Diagram: ConstructConnect.
Chart 2: US Monthly Introductory Single and Multi-Family Housing Construction at
Seasonally Adjusted Annual Rates (SAAR)
The latest data refers to October 2021.
Data Source: US Census Bureau (Department of Commerce).
Diagram: ConstructConnect.
Chart 3: Total U.S. Housing Starts at
Seasonally Adjusted Annual Rates (SAAR)
The latest data point is for October 2021.
Data Source: US Census Bureau (Department of Commerce).
Diagram: ConstructConnect.
Chart 4: US Monthly Residential Building Permits at
Seasonally Adjusted Annual Rates (SAAR)
The latest data point is for October 2021.
Data Source: US Census Bureau (Department of Commerce).
Diagram: ConstructConnect.
Chart 5: US Housing Starts
, Jan-Oct 2021 and Jan-Oct 2020, % change
Based on seasonally adjusted and annualized average monthly unit launches (SAAR).
* "Single" includes townhouse complexes, except where multiple units share heating and air conditioning.
Data source: U.S. Census Bureau.
Chart: ConstructConnect.
Chart 6: Number of residence permits issued (units) since the beginning of the year in the 36 most populous urban statistical areas in the United States (MSA)
(January-October 2021)
At the city level, the number of housing permits issued is a proxy for the start of housing construction.
Data source: U.S. Census Bureau.
Chart: ConstructConnect.
Chart 7: YTD percentage change in housing permits issued (units) in the 36 most populous U.S. metropolitan statistical areas (MSA)
(Jan-Oct 2021 vs. Jan-Oct 2020)
At the city level, the number of housing permits issued is a proxy for the start of housing construction.
Data source: U.S. Census Bureau.
Chart: ConstructConnect.
Canadians are obsessed with residential real estate
The vertical bars in Chart 8 for Canada Monthly Housing Entry (SAAR) appear as descending steps since May of this year. March has risen to an all-time high of 333,000 units (SAAR), but the afterglow is fading.
With only two months to go until 2021, new home builds in Canada will almost certainly end the year by at least a quarter of 2020 and about one third of the long-term average of the last 21 years (i.e. 2000 to 2020). year included).
The long-term average annual housing construction in Canada is about 200,000 units, whether measured over the last decade, the previous decade, or both decades combined since the turn of the century. It's just another way of saying that new home construction in Canada has remained remarkably stable, around 200,000 units a year, for a long time.
Chart 13 shows that only when the economy was hit hardest during the global financial crisis in 2019 and most recently during the year and a half of the pandemic has there been significant deviations from the 200,000 unit (SAAR) level for Canadian housing. starts.
Graph 13 also points to a surprising fact. On a population-adjusted basis, the number of new homes in Canada has exceeded the number of new homes in the US every month for the last 16 years since January 2006 (the US population is nine times that of Canada).
US stock markets have fared much better than Canada's main trading post, the Toronto Stock Exchange, since the 2008-2009 recession. At the close in October 2021, the NASDAQ index was +1025% compared to July 2009; TSX was +159%.
America, which is home to many of the world's largest corporations and is especially blessed with the head offices of high-tech leaders, has enjoyed an enthusiastic shareholding of its citizens.
Canadians tended to go in the other direction, relying more on rising house prices than on buying stocks to create wealth. At the very least, talk of astounding cases of rising house prices has become a major concern for Canadians.
There is another factor that has traditionally been a big supporter of housing construction north of the border. Among the industrialized countries, Canada was the leader in population growth, which led to a circular dispute. Being a home to more people means needing more homes.
Chart 8: Monthly Introductory Housing Construction in Canada at
Seasonally Adjusted Annual Rates (SAAR)
Data Source: Canadian Mortgage and Housing Corporation (CMHC).
Diagram: ConstructConnect.
Chart 9: YTD Percent Change in New Homes -
Canadian Province Rankings
(Jan-Oct 2021 and Jan-Oct 2020)
Data Source: Canadian Mortgage and Housing Corporation (CMHC) based on actual data, not seasonally adjusted data.
Diagram: ConstructConnect.
Chart 10: Percent Change in New Homes YTD -
Canada's Largest Cities Ranking
(Jan-Oct 2021 and Jan-Oct 2020)
Census Canada (CMA) urban areas have a population of over 50,000.
The 6 CMAs of Canada with a population of over 1 million are shown in capital letters.
Data Source: Canadian Mortgage and Housing Corporation (CMHC) based on actual data, not seasonally adjusted data.
Diagram: ConstructConnect.
Chart 11: Housing starts in the 6 most populous cities in Canada,
January to October 2021, actual data
Data Source: Canadian Mortgage and Housing Corporation (CMHC).
Diagram: ConstructConnect.
Chart 12: Housing construction in Canada's 6 most populous cities,
Jan-Oct 2021 and Jan-Oct 2020
Data Source: Canadian Mortgage and Housing Corporation (CMHC).
Diagram: ConstructConnect.
Chart 13. US and Canada
Seasonally Adjusted Annual Home Startups Monthly (SAAR)
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