DEFINITIONS

A housing start is defined as the start of construction of a new housing unit, when located within a new building which is intended primarily as a housekeeping residential building designed for nontransient occupancy. Start of construction for private housing units is defined as the beginning of excavation for the footings or foundation of a building; for public housing units it is defined as when the construction contract is awarded. All housing units in a multi-family building are counted as being started when excavation for the building is started.

A housing unit is a single room or group of rooms intended for occupancy as separate living quarters by a family, by a group of unrelated persons living together, or by a person living alone. Separate living quarters are those in which the occupants do not live and eat with any other persons in the structure and which have either (1) direct access from the outside of the building or through a common hall which is used or intended to be used by the occupants of another unit or by the general public; or (2) complete kitchen facilities for the exclusive use of the occupants.

A housekeeping residential building is one consisting primarily of housing units. New housing starts exclude group quarters (such as dormitories and rooming houses), transient accommodations (such as transient hotels, motels, and tourist courts), mobile homes (trailers), moved or relocated buildings, and housing units created in an existing residential or nonresidential structure. However, in a building combining substantial residential and nonresidential floor areas, every effort is made to include the residential units in these statistics even though the primary function of the entire building is for nonresidential purposes.

Housing units, as distinguished from mobile homes, include conventional "stick built" units, prefabricated, panelized, componentized, sectional and modular units. Except for table 8, mobile homes-single wide and multi-wide-are excluded from the statistics. A mobile home is defined as a portable dwelling constructed to be towed on its own chassis and designed for use without a permanent foundation; it is manufactured with the running gear an integral part of the unit and can be towed from site to site.

Publicly owned housing includes housing units in buildings for which construction contracts were awarded by Federal, State or local governments. Units in structures built by private developers for sale upon completion to local public housing authorities under the U.S. Department of Housing and Urban Development "Turnkey" program are classified as private housing.

The statistics, by type of structure, refer to the structural characteristics of the building. The one-unit structure category includes fully detached, semidetached (semiattached, side-byside), rowhouses, and townhouses. In the case of attached units, each must be separated from the adjacent unit by an unbroken ground-to-roof party wall in order to be classified as a oneunit structure. Units built one on top of another and those built side-by-side which do not have an unbroken ground-toroof party wall and/or have common facilities, i.e., attic, basement, heating plant, plumbing, etc., are classified by the number

of units in the structure (i.e., two-unit structure, three-unit structure, etc.). In these statistics, apartment buildings are defined as buildings containing five units or more. Apartments in a conventional-type apartment building may share a common basement, heating plant, stairs, entrance halls, and water supply and sewerage disposal facilities. Townhouse apartments, though attached, are not separated by an unbroken ground-to-roof party wall and share some interstructural facilities such as water supply, sewerage disposal, etc.

Ownership is not the criterion for structural classifications in this report. A condominium apartment building is classified with apartment buildings in structures with five units or more despite the fact that each unit is individually owned. Condominium townhouses may be in the one unit category if each unit is separated from its neighbor by an unbroken ground to roof party wall (no commonly shared interstructural facilities), or in the multiunit building categories if they are not separated from each other by an unbroken ground-to-roof party wall (share interstructural facilities).

The standard census geographic regions are used in the tables of this report. States contained in each region are as follows: Northeast-Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, and Pennsylvania; North Central-Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas; South-Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Kentucky, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Oklahoma, and Texas; WestMontana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, Nevada, Washington, Oregon, California, Alaska, and Hawaii.

The distribution of housing starts between units inside and outside Standard Metropolitan Statistical Areas (SMSA's) is based on the definitions published by the Office of Management and Budget in Standard Metropolitan Statistical Areas. Data for the period beginning January 1976 are based on the 1974 definitions as amended August 1975; data for the period January 1975-December 1975 are based on the 1967 definitions, as amended April 1974; data for the period January 1974December 1974 are based on the 1967 definitions, as amended November 1973; data for April 1973-December 1973 are based on the 1967 definitions as amended February 1973; data for April 1968-March 1973 are based on 1967 defintions.

HOUSING STARTS COMPILATION

The compilation of the housing starts series is a multistage process. First, an estimate is made monthly of the number of housing units for which building permits have been issued in all 14,000 permit-issuing places (table 6). The preliminary estimate of building permit authorizations is based on a sample of 2,800 permit-issuing places. The revised estimate is based on a sample of 6,800 of these 14,000 jurisdictions.

Second, within 137 sampled land areas (counties or groups of counties) an independent survey is conducted monthly in at subsample of the permit-issuing places (approximately 950)

to estimate the rate at which permit authorized buildings are started. In each place a sample of building permits is selected. For each permit selected, an inquiry is made of the owner or the builder to determine in which month and year the unit(s) covered by the permit was (were) started. In case the units authorized by permits in a particular month are not started by the end of that month, follow-ups are made in successive months to find out when the units were actually started.

From this sample of permits, ratios are calculated (by type of structure) of the number of units started to the number of units covered by permits; separate ratios are calculated for units. started from permits of that month and of each preceding month. These ratios or start rates are then applied to the appropriate estimate of the number of units authorized by permits (preliminary based on the 2,800 place sample or final based on the 6,800 place sample) to provide estimates of the number of units started for each month of authorization. These estimates are aggregated to structural totals within the four Census regions.

Having produced estimates of the number of units started with permit authorization, two additional adjustments are made.

1. An upward adjustment of 3.3 percent is made to the number of one-unit structures (single family houses) started to take care of those units started within permit-issuing areas but without permit authorization. (A study spanning a four year period indicated that permits were obtained for all buildings with two housing units or more.)

2. Upward imputations are made to account for those units. started prior to permit authorization and for late reports.

The results of the procedures outlined above are the published estimates for housing units started in the 14,000 permitissuing places (table 3).

Third, an estimate of the number of units started in areas where building permit systems do not exist is made. Within the 137 sampled land areas, visits are made to a select group of persons who are presumed most likely to know about local housing activities in those areas not covered by permit jurisdictions. A list is obtained from them of all residential buildings they know to have been started within these areas during the preceding month. The information provided by these sources is verified by field visit or by telephone interview with the owner or builder. In addition, a subsample of 100 small land areas is canvassed intensively by Census employees who look for all units started since the previous month, identifying those not reported by the sources as well as those reported by them. This canvass provides a basis for estimating the number of units not reported by the local sources. Units not reported by local sources are then added to the number of units reported by these sources, with appropriate weighting, to provide an estimate of total housing starts in areas not covered by building permit systems.

Addition of this estimate of starts in nonpermit areas to the estimate of starts in the 14,000 permit-issuing places results in an estimate of total private housing units started (table 2).

Fourth, information on public housing starts is obtained, for the most part, from the agencies involved, e.g., Department of Housing and Urban Development, Department of Defense, etc. (table 4). Combining private and public starts results in an estimate of total units started (table 1).

STARTS BY TYPE OF STRUCTURE

A total of 14 different sets of starts rates that change from month to month are employed to calculate number of housing units started by type of structure in permit places. Eight sets of starts rates are used for one-family houses: separate sets of rates for metropolitan and nonmetropolitan areas within each. of the four regions. For structures with five units or more, separate sets of starts rates are used for each of the four regions. Single sets of starts rates are used for all regions for structures with two units and for structures with three to four units.

Starts by type of structure in nonpermit areas are calculated directly in the estimating procedure described above.

BUILDING PERMITS

Data on housing units authorized by local building permits relate to the time of issuance rather than to the actual start of construction. They do, however, provide some indication of activity in residential building in advance of the start of actual construction. Although construction is started on most residential buildings in the same month in which the permit is issued, several months may pass before start of construction.

The 14,000 are as with local building permit systems for which figures are currently given in this report (table 6) account for a major portion of residential building in the United States. For the country as a whole, approximately 82 percent of the private housing units were constructed in permit-issuing places in 1977.

The monthly series and 1973 through 1976 annual data reflect the 14,000 places in the United States which were identified in 1972 as having local building permit systems. Annual data for both the 13,000 and 14,000 places are shown for 1971 and 1972. Annual data for 1968 through 1970 reflect the 13,000 places identified in 1967 as having local building permit systems.

Basically, the procedure followed in arriving at the monthly. building permit authorization totals involves the cumulating of monthly data from all permit-issuing places that authorized 50 housing units or more (20 or more in some states) in a recent year along with estimates for the less active places based on a stratified probability sample of these places.

A more detailed discussion of the uses and limitations of building permit data is provided in the Census Bureau's monthly report on Housing Authorized by Building Permits and Public Contracts (C40).

MOBILE HOME SHIPMENTS

Beginning with the data for November 1977, the statistics on manufacturers' shipments of mobile homes produced by the National Conference of States on Building Codes and Standards (NCSBCS) are published in this report in lieu of those previously provided by the Manufactured Housing Institute

(MHI). The MHI has accepted and now publishes the NCSBCS statistics. For further information on NCSBCS data collection procedures, write to NCSBCS, 1970 Chain Bridge Road, McLean, Virginia, 22101.

The total of new housing starts and manufacturers' shipments of mobile homes is shown because both are additions to the housing supply. Some of the mobile homes shipped by manufacturers, however, are used for nonresidential purposes. The number of mobile homes used in this way is not known.

SAMPLING VARIABILITY

The various estimates of private residential housing units started and private housing units authorized by local building permits, which are shown in this publication, are based on sample surveys and may differ from statistics which would have been obtained from a complete census using the same schedules and procedures.

An estimate based on a sample survey is subject to both sampling error and nonsampling error. The accuracy of a survey result is determined by the joint effect of these errors. Sampling error reflects the fact that only a particular sample was surveyed rather than the entire population. Estimates of the size of the sampling errors are provided by the standard error of the estimates. Nonsampling errors can be attributed to many sources: inability to obtain information about all cases in the sample; definitional difficulties; differences in interpretation of questions; inability or unwillingness of respondents to provide correct information; and errors made in processing the data. No explicit measures of the effects of nonsampling errors are available; however, it is believed that most of the important response and operational errors were detected in the course of reviewing the data for reasonableness and consistency. As derived for this report, the estimated standard errors include part of the effect of nonsampling errors but do not measure any systematic biases in the data.

Each sample selected for the Housing Starts and Building Permits surveys is one of a large number of similar probability samples that, by chance, might have been selected under the same specifications. Estimates derived from the different samples would differ from each other. The standard error or sampling error of a survey estimate is a measure of the variation among the estimates from all possible samples and thus is a measure of the precision with which an estimate from a particular sample approximates the average results of all possible samples.

Estimates of the standard errors have been computed from the sample data for selected statistics in this report. They are presented in the form of relative standard errors, the standard error divided by the estimated value to which they refer.

The sample estimate and an estimate of its standard error permit us to construct interval estimates with prescribed confidence that the interval includes the average result of all possible samples (for a given sampling rate). For example, suppose table 1 of this report showed an estimated 80,000 units in one-unit structures were started in a particular month. Further, suppose that the relative standard error of this estimate is 4 percent. Multiplying 80,000 by .04, we obtain 3,200 as the standard error. This means that we are confident, with two chances out of three of being correct, that the average

estimate from all possible samples of one-unit structures started during the particular month is between 76,800 and 83,200 units. Doubling the interval gives us limits of 73,600 and 86,400, increasing our confidence of being correct to 19 out of 20 times that the interval contains the average value over all possible samples. We would have almost certain confidence by tripling the interval. The average estimate of one-family units. started during the specified month may or may not be contained in any one of these computed intervals; but for a particular sample, one can say that the average estimate from all possible samples is included in the constructed interval with a specified confidence; that is, two chances out of three, etc.

Relative standard errors shown in tables 1 and 3 were computed on new private housing units started, since statistics on public housing units started are not based on samples. The relative standard errors in tables 1, 3, and 6 may be applied to the corresponding seasonally adjusted estimates in tables 5, 3, and 6 respectively.

SEASONAL ADJUSTMENTS

Seasonally adjusted estimates of housing starts are the actual number of housing units started in a month adjusted to remove the normal seasonal movement. This adjustment takes into account month-to-month variations resulting from normal or average changes in weather conditions, from differences in the lengths of the months and from differences in the composition (trading-day variation) of the months. The purpose of this seasonal adjustment is to bring out underlying cyclical trends.

The seasonally adjusted annual rate is the seasonally adjusted monthly rate multiplied by 12. The seasonally adjusted annual rate for a particular month, such as July, can be interpreted to mean that if the only changes which occur in housing starts from July through June of the following year were the normal seasonal changes described by the seasonal indexes, then the total starts in that 12-month interval would equal the seasonally adjusted annual rate for July. The seasonally adjusted annual rate has the advantage of facilitating comparisons with previous annual start figures as well as with the seasonally adjusted annual rates for prior months. The seasonally adjusted annual rate is, of course, neither a forecast nor a projection; rather it is a description of the rate at which housing starts are proceeding in the particular month for which it is calculated.

It should be noted that the seasonal indexes adjust for average monthly weather conditions among other normal seasonal influences but not for year-to-year variations in weather or in other seasonal influences within the same month. Attempts to adjust the monthly housing starts figures for unusual weather conditions have thus far been unsuccessful. A summary of research to date on this subject was given in an article which appeared in the August 1968 issue of Construction Review.

The seasonal factors for Private Housing Starts and Building Permits were developed using the X-11 version of the Census Method II. A description of the X-11 version appears in Bureau of the Census Technical Paper No. 15, "The X-11 Variant of the Census Method II Seasonal Adjustment Program."

Housing Starts

Seasonal adjustments for Private Housing Starts for the months covered in this report are based on data for the period

January 1964 through December 1977. Seasonal indexes were developed for total private housing starts by region and type of structure within each region, e.g., single family units in the Northeast. The seasonally adjusted total is the sum of 12 seasonally adjusted components-three structure types in each of the four regions. The seasonal indexes for Private Housing Starts shown in table A-1 include trading-day factors which were estimated internally by the regression routine.

Building Permits

Seasonal adjustments for Building Permits for the months. covered in this report are based on data for January 1960 through March 1978. Seasonal factors were developed separately for permits issued by geographic region and type of

structure.

Building permits data contain significant trading-day variation and are therefore adjusted for this variation in order to reduce irregular fluctuations in the series. The daily pattern obtained empirically from the data closely approximates a 5-day week in which Monday through Friday are assigned equal weight and Saturday and Sunday receive zero weight, and thus the trading-day adjustment is based on this pattern. There is no holiday adjustment in the assignment of daily weights. The seasonal indexes shown in table A-2 are the product of seasonal and trading-day factors.

Mobile Home Shipments

Seasonal adjustment of mobile home shipments for the period beginning January 1974 is based on shipments from January 1959 through December 1975 and preliminary shipments from January 1976 through September 1976. These statistics on manufacturers' shipments of mobile homes were provided by the Manufactured Housing Institute and included estimates for firms not associated with MHI. The seasonal indexes shown in table A-2 include trading-day adjustment factors.

CENSUS BUREAU CONSTRUCTION REPORTS AND RELATED PUBLICATIONS

Construction Reports, Series C21: New Residential Construction in Selected Standard Metropolitan Statistical Areas. (quarter)

Construction Reports, Series C22: Housing Completions (month)

Construction Reports, Series C25: Sales of New One-Family Houses (month)

Construction Reports, Series C27: Price Index of New OneFamily Houses Sold (quarter)

Construction Reports, Series C30: Value of New Construction Put in Place (month)

Construction Reports, Series C40: Housing Authorized by Building Permits and Public Contracts (month)

Construction Reports, Series C41: Authorized Construction, Washington, D.C. Area (month)

Construction Reports, Series C45: Housing Units Authorized for Demolition in Permit-Issuing Places (year) Construction Reports, Series C50: Expenditures on Residential Additions, Alterations, Maintenance and Repairs, and Replacements (year)

Housing Construction Statistics, 1889 to 1964: A historical supplement to Construction Reports, Series C20 and C40. Value of New Construction Put In Place, 1947 to 1974: A historical supplement to construction reports, Series C30. Housing Starts, 1959 to 1971: A historical supplement to Construction Reports, Series C20.

Construction Review: A monthly publication of the Bureau of Domestic Commerce, U.S. Department of Commerce.