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Friday, May 16, 2014

April 2014 Residential Permits, Starts and Completions

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Total housing starts rose noticeably in April, to a seasonally adjusted and annualized rate (SAAR) of 1.072 million units. That was 125,000 more units (26.4 percent) than March’s 947,000, and just 3.0 percent below November’s peak of 1.101 million units. The multi-family component contributed virtually all of the increase (120,000 units or 39.6 percent); the single-family component edged up by 5,000 units (0.8 percent).
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The year-over-year percentage change in total starts popped back into positive territory in April, rising to 24.4 percent. Single-family starts were 8.7 percent above year-earlier levels; the more volatile multi-family component jumped 65.7 percent. 
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Completions edged lower (-34,000 units or 3.9 percent) in April, to 847,000 units SAAR. The decrease occurred in both the single-family (-15,000 units) and multi-family (-19,000 units) components. Total completions were 18.9 percent above year-earlier levels. 
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Total permits advanced by 80,000 units (8.0 percent) SAAR, to 1.080 million in April -- the highest level since June 2008. The increase occurred almost entirely in the multi-family component (78,000 units or 19.5 percent); single-family permits were nearly flat (+2,000 units or 0.3 percent). Total permits were 3.8 percent higher than year-earlier levels. The multi-family component was 14.4 percent higher than April 2013 but the single-family component was 3.2 percent lower.
The rate of growth in total permits extended the slowing trend seen since late 2012 despite April’s positive monthly and annual percentage changes. Builder confidence seemed to better reflect trends in the market for single-family homes. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) fell one point in May, to 45, from a downwardly revised April reading of 46. “After four months in which the HMI has shown little signs of fluctuation, it is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery,” said NAHB Chair Kevin Kelly. 
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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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