Housing Starts

What Are Housing Starts?

Housing Starts (HOUST on FRED) measures the monthly count of new privately-owned residential construction projects begun in the US, reported as a seasonally-adjusted annualised rate. The Census Bureau publishes the data as part of the New Residential Construction report, alongside building permits and housing completions.

The series is split between single-family starts and multi-family starts (buildings with five or more units). The two series often diverge: multi-family starts tend to be more volatile and more institutional-investor-driven; single-family starts are more retail-housing-market-sensitive.

Why It Matters for Markets

Housing starts is one of the four primary inputs to the Conference Board Leading Economic Index because of its rate-sensitivity and forward-looking nature. It is also a major input to GDP nowcasting through the residential investment line.

The release moves homebuilders (XHB, ITB), building-products stocks, mortgage REITs, and bond yields on surprises. The 10-year Treasury typically moves 3-7 basis points on the release; equity homebuilder ETFs can move 1-2% on large surprises.

How to Read the Print

Three-month moving average. The monthly data are noisy because of weather effects (cold winters delay starts; warm springs accelerate them). The 3-month moving average smooths the weather noise.

Single-family vs multi-family split. The two series tell different stories. Single-family starts have been below their pre-2020 trend through 2024-2025 because of mortgage-rate-driven affordability pressure; multi-family starts have been more volatile.

Starts vs permits. Building permits lead starts by 1-2 months. The gap between the two reveals dynamics: permits running ahead of starts signals approved projects waiting on financing or labour; permits running behind starts signals builders breaking ground on previously permitted projects.

Regional breakdown. The Census Bureau publishes starts by Census region (Northeast, Midwest, South, West). Regional variation reveals migration patterns and local housing-market dynamics.

Historical Context

Housing starts averaged approximately 1.4 million annualised during the 2010-2019 expansion. The pandemic shock initially depressed starts then drove them above 1.8 million by early 2022 as low rates and pandemic-era housing demand surged. The 2022-2023 rate-hike cycle drove starts down to roughly 1.3-1.4 million by 2023-2024.

Through 2024-2025, starts have run in the 1.35-1.45 million range — broadly in line with the 2010s norm but below the pandemic peak. The slow recovery reflects the persistent mortgage-rate environment despite Fed cuts: long-end yields and elevated mortgage spreads have kept mortgage rates near 6.5-7.0% even as the front end of the curve has moved lower.