PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Housing Gains in February: Good News for Small Businesses in the Sector

By at 21 March, 2024, 5:37 pm

by Raymond J. Keating –

Residential housing is nearly all about small businesses. Among employer firms in the residential building construction sector:

● 92.3 percent have fewer than 10 workers

● 97.3 percent fewer than 20 employees

● 99.7 percent fewer than 100 workers

(Based on 2021 U.S. Census Bureau data.)

So, when we review the latest data on housing from the U.S. Census Bureau, it’s always a small business story.

In February, privately-owned housing starts at a seasonally adjusted annual rate of 1,521,000  grew by 10.7 percent versus the previous month, and were up by 5.9 percent compared to a year earlier. Within these numbers, February single-family housing starts grew by 11.6 percent versus January.

Meanwhile, building permits – which serve as an estimate of future starts – at a seasonally adjusted annual rate of 1,518,000 were up by 1.9 percent versus January, and up by 2.4 percent versus a year earlier.

It’s also worth noting that the National Home Builders Association’s reading on builder sentiment moved above a key level. As reported:

“Builder confidence in the market for newly built single-family homes climbed three points to 51 in March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI)… This is the highest level since July 2023 and marks the fourth consecutive monthly gain for the index. It is also the first time that the sentiment level has surpassed the breakeven point of 50 since last July.”

Yes, the latest housing numbers and reading on builder confidence rank as positives for small businesses and the economy – to be tossed into an economy overflowing with contradictory economic measures.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

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