Housing starts are among the most influential collections of data in the world of real estate, but a Washington Post blog has laid bare some troubling flaws with the data’s collection.
Here are the five most notable inconsistencies with the statistic:
- Housing starts data came out last week, and amidst the promising increases (which we, like many other outlets, reported on), was this fact – starts rose 2.6 percent, but they could have fallen by 12.2 percent or risen by 17.4 percent. Why? The Census Bureau’s margin of error was 14.8 percent.
- As the Chief of the Bureau’s Residential Construction Branch, Raemeka Mayo, explained to the Post, the Bureau follows a process to collect its data. First, it gets fresh building permit info from 900 of around 19,000 offices that issue permits.
- Then, after identifying the properties to track, they follow all projects with five or more housing units, but only 1 out of every 50 other projects.
- How they follow the construction is similarly scattered. Once construction begins, the Bureau visits the sites or chats with the builders/property owners, and follow up each month until the project is completed and becomes part of the Bureau’s housing completions total.
- The reported margins of error for the past three months were the following: 15.6 percent in March, 15.9 percent in February and 16.8 percent in January.