Another Heavily Revised Housing Starts Joke of a Report for May 2023

 

Today the Census Department released the New Residential Construction Report for May 2023.

The report contains more enormous revisions.

Last month I stated “History suggests the April rise will be revised away in May.”

Sure enough. The Commerce Department revised housing starts in April from 1,401,000 to 1,340,000. That’s a negative revision of 4.4 percent. The big jump in April is now a reported decline. So take the huge jump this month with with a heavy dose of skepticism.

April Revision Notice

With this release, unadjusted estimates of housing units authorized by building permits for January through December 2022 have been revised. Also, seasonally adjusted estimates of housing units authorized by building permits have been revised back to January 2017, and seasonally adjusted estimates of housing units authorized but not started, started, under construction, and completed have been revised back to January 2018. All revised estimates are available on our website. 

Building Permits 

• Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,491,000. This is 5.2 percent above the revised April rate of 1,417,000, but is 12.7 percent below the May 2022 rate of 1,708,000.
• Single‐family authorizations in May were at a rate of 897,000; this is 4.8 percent above the revised April figure of 856,000.
• Authorizations of units in buildings with five units or more were at a rate of 542,000 in May

Housing Starts

• Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,631,000. This is 21.7 percent (±14.8 percent) above the revised April estimate of 1,340,000 and is 5.7 percent (±10.8 percent) above the May 2022 rate of 1,543,000.
• Single‐family housing starts in May were at a rate of 997,000; this is 18.5 percent (±14.1percent) above the revised April figure of 841,000.
• The May rate for units in buildings with five units or more was 624,000.

Housing Completions 

• Privately‐owned housing completions in May were at a seasonally adjusted annual rate of 1,518,000. This is 9.5 percent (±12.3 percent) above the revised April estimate of 1,386,000 and is 5.0 percent (±13.0 percent) above the May 2022 rate of 1,446,000.
• Single‐family housing completions in May were at a rate of 1,009,000; this is 3.9 percent (±13.9 percent) above the revised April rate of 971,000.
• The May rate for units in buildings with five units or more was 493,000.

Note the margins of error in these stats. And they are needed.

History suggests the May rise will be revised away in June just as the big jump in April was revised away in May. I did not take a dive into the published revisions all the way back to 2017. 

Of the alleged 1.631 million seasonally-adjusted, annualized starts, 997,000 were single-family and 634,000 multi-family. 

The actual number of starts in May was 151,000 not 1.631 million. 

Easy Comparisons Looking Ahead

Housing starts are 12.7 percent below the level of a year ago. Looking ahead, year-over-year comparisons will be much easier.

https://mishtalk.com/economics/another-heavily-revised-housing-starts-joke-of-a-report-for-may-2023/