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Total
housing starts rose retreated
in May, to a seasonally adjusted and annualized rate (SAAR) of 1.001 million
units. That was 70,000 fewer units (-6.5 percent) than April’s 1.071 million, and
9.4 percent below November’s peak of 1.105 million units. The decrease in
starts was about evenly split -- single-family: -39,000 units (5.9 percent); multi-family:
-31,000 units (7.6 percent).
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The
year-over-year percentage change in total starts also slowed in May, falling to
8.0 percent. Single-family starts were 3.1 percent above year-earlier levels;
the more volatile multi-family component shrank to +17.7 percent.
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Completions
edged higher (+57,000 units or 6.8 percent) in May, to 897,000 units SAAR. The
multi-family component dominated the increase (+44,000 units or 18.7 percent); single-family
completions: +13,000 units or 2.1 percent. Total completions were 25.6 percent
above year-earlier levels.
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Total
permits retreated by 68,000 units (-6.4 percent) SAAR, to 991,000 in May. The decrease
occurred entirely in the multi-family component (-90,000 units or 19.5
percent), more than offsetting the 62,000-unit gain in April. Single-family
permits rose by 22,000 units (3.7 percent). Most troubling, total permits were 6.4
percent lower than year-earlier levels -- the single- and multi-family
components were, respectively, 5.3 and 8.4 percent lower.
The
rate of growth in total permits extended the slowing trend seen since late 2012.
We find it interesting that builder behavior does not seem to reflect the
improvement in confidence reported in the latest National Association of Home
Builders/Wells Fargo Housing Market
Index (HMI). The HMI rose four points in June, to 49. “Consumers are still hesitant, and are waiting for
clear signals of full-fledged economic recovery before making a home purchase,”
said NAHB Chief Economist David Crowe. “Builders are reacting accordingly, and
are moving cautiously in adding inventory.”
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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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