AP's Kravitz Makes It Appear as If Builders Started Almost 1.5 Million Single-Family Homes in Past Three Months

Yesterday, the initial one-sentence squib from the Associated Press on the Census Bureau's monthly housing construction release stated that "(A) Surge in apartments offsets weak single-family homes, pushing housing starts up 1.5 percent" (the headline reads the same).

By the time AP real estate writer Derek Kravitz turned it into a full-blown report, the headline became "US housing starts rise modestly to start new year." The opening sentence now reads: "Construction of single-family homes in the U.S. cooled off slightly in January after surging in the final month last year." The word "weak" is not in the report. It won't surprise anyone that the wire service's initial unfiltered reaction was more correct. What may surprise even those who are used to AP misdirection is that Kravitz made it appear to those who don't know better, which would include a large number of newspaper, TV, and radio journalists, that construction began on almost 1.5 million single-family homes during the past three months. Really.


Let's look at his first four paragraphs (bolds are mine):

Construction of single-family homes in the U.S. cooled off slightly in January after surging in the final month last year. But a rise in permits suggests builders are growing more confident that more buyers are ready to come off the sidelines.

The Commerce Department said Thursday that builders broke ground on a seasonally adjusted annual rate of 699,000 homes in January. That's up 1.5 percent from December and nearly matches November's three-year high for starts.

Construction began work on 508,000 single-family homes last month. That's a 1 percent drop from December and the first decline in four months. A big rise in volatile apartment construction helped offset the decline in single-family homes.

Still, December single-family homes were revised up strongly to show builders started 513,000 homes — a 12 percent gain from November.

I believe that the average reader of the last two excerpted paragraphs, after getting past the fact that "construction" should not be the subject of the third paragraph, will believe that America's super-duper busy single-family homebuilders somehow were able to begin work on:

  • 508,000 homes in January.
  • 513,000 in December.
  • 458,000 in November
  • 1.479 million homes during the past three months.

The real numbers are as follows:

  • January -- 32,900
  • December -- 31,200 (this is Kravitz's reported "surge" from November. He cannot be serious.)
  • November -- 32,700
  • Three-month total -- 96,800 (in a country with well over 100 million households)

I daresay that most news consumers among those who do not follow business closely will not detect the fact that Kravitz's figures in the two paragraphs containing the single-family information are annualized, and over 15 times higher than the raw number the Census Bureau actually reported.

Are readers automatically supposed to be discerning enough to know that these are annual rates, especially since the verbs in the second, third and fourth paragraphs change from "builders broke ground" to the nonsensical "construction began work" to "builders started"? Are they really supposed to know that because the figure in the second paragraph is annualized that those in the third and fourth are as well? That's a not-credible stretch.

The way the report is written makes it way too easy to believe that Kravitz and his wire service's AWOL editors are hoping that gullible anchors at subscribing AP outlets around the country read part or all of the last two excerpted paragraphs verbatim yesterday and thereby grossly misinformed their readers.

Now let's look at another fundamental error inherent in the AP's headline, which equates housing starts with "construction." Kravitz compounds the error in his write-up in this delusional paragraph:

Single-family home construction rose in each of the final three months of last year, bringing the pace of those starts to the highest level since April 2010. The modest but steady gains helped boost confidence among builders after the worst year for single-family home construction on record.

As much as Kravtiz & Co. may want to wish it were so, the term "housing starts" isn't the same as "construction," and never will be. Any evaluation of "construction" involves looking at starts, units in progress, and completions.

A more complete portrayal of the single-family home construction picture in January is as follows:

  • January's actual figure for single-family starts of 32,900 is almost 24% above January 2011, but only about 4% above January 2010. It is below (miles below in most instances) every other January except 2009 and 1982 on records going back to 1959.
  • 227,300 single-family units were actually under construction in January (241,000 on a seasonally adjusted basis). The first figure is the second-lowest since monthly recordkeeping began in 1969. Only December 2011 was lower, meaning (because November's value was greater) that Kravitz's alleged three-month rise in "construction" doesn't exist. The seasonally adjusted under-construction figure is the sixth-lowest on record; only the final five months of last year were lower; in this instance, December's 235,000 was also lower than November's 236,000.
  • Only 25,800 single-family units were completed last month. That's an all-time low in the 44 years such records have been kept, and occurred despite the fact that January's weather around the country was relatively mild. The second-lowest monthly figure was 28,200 in March of last year. The seasonally adjusted annualized amount of 389,000 is the second-worst on record, only ahead of the 374,000 figure reported in March 2011.

In full context, the starts data do not demonstrate any kind of rise in "construction." Instead, it looks like builders are in many cases only doing basic early work on their single-family lots and walking away until market conditions improve (you're a journalist, Derek; how about checking that possibility out?). Meanwhile, the number of homes under construction is still virtually touching rock bottom, and the number builders are actually finishing is at an all-time low.

I could have shortened my post considerably by simply asserting that "this is disgraceful slop." Maybe next time I will and simply link back to this post, given that Kravitz & Co. are likely to repeat the same errors next time.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.