2013 housing starts approach 1 million; Maine to Hawaii gains

Sources: Portland Cement Association; CP staff

A PCA report released in advance of the International Builders’ Show, January 22–24 in Las Vegas, projects total 2013 housing starts to reach 954,000 units, reflecting further improvement in last year’s nearly 30 percent growth.

“The possibility of one million starts in 2013 should not be dismissed,” affirms PCA Chief Economist Ed Sullivan. “Although the first half 2013 will be mired in a fiscal cliff hangover, we are decidedly optimistic about second half economic growth, job creation and consumer sentiment—all of which translate into a stronger home sales and starts activity.”

Even stronger growth in homebuilding is predicted to materialize in 2014, with single-family and multiunit housing starts surpassing 1.1 million, he adds. In another optimistic turn from previous residential forecasts, PCA expects the recovery to be broad-based, with all 50 states logging increases in single family housing activity this year. Already underway in the interior U.S., the emergence of accelerating construction growth has begun to appear in states hard hit by the housing bubble burst. These regions are now likely to lead growth in coming years as long depressed markets begin to return to home building rates consistent with their demographics.

“As the recovery unfolds, regions that once lagged recovery now emerge as growth leaders. The Southwest and Southeast, for example, still have the weakest housing fundamentals on a relative basis to the interior U.S, but on a construction activity basis—given the extremely depressed bases from which these regions are recovering from—they will likely be the housing growth leaders in coming years,” says Sullivan.

PCA expects multifamily unit construction to continue to grow at a strong pace as favorable fundamentals fuel the sector. Multifamily unit starts recorded 55 percent and 36 percent gains in 2011 and 2012, respectively. PCA expects an additional growth of 15 percent in 2013, to 277,000 units.