Click image
for larger view
Click image
for larger view
Total
housing starts retreated
in August, to a seasonally adjusted and annualized rate (SAAR) of 956,000 units.
That level was 161,000 fewer units (-14.4 percent) than July’s 1.117 million
(upwardly revised from the initial estimate of 1.093 million) – which was the
fastest rate since November 2007. Ninety percent of the decrease in total
starts occurred in the multi-family component (-145,000 units or 31.7 percent);
single-family starts fell by 16,000 units (-2.4 percent).
Click image
for larger view
Unsurprisingly,
the year-over-year percentage change in total starts also slowed in August, falling
back to 7.0 percent. Single-family starts were 4.1 percent above their year-earlier
level; the more volatile multi-family component dropped to 13.8 percent above
its August 2013 level.
Click image
for larger view
Click image
for larger view
Completions
increased by 28,000 units (3.2 percent) in August, to 892,000 units SAAR. All
of the increase occurred in the multi-family component (+81,000 units or 36.8
percent) as the single-family component decreased (-53,000 units or 8.2 percent).
Total completions were 19.8 percent above their year-earlier level.
Click image
for larger view
Click image
for larger view
Total
permits decreased by 59,000 units (-5.6 percent), to 998,000 SAAR in August. As
was the case with starts, the decrease occurred almost entirely in the
multi-family component (-54,000 units or 12.7 percent). Single-family permits inched
lower (5,000 units or 0.8 percent). Total permits were 0.3 percent below
year-earlier levels; single- and multi-family components were, respectively, 5.2
and 9.3 percent lower.
It
appears the slide in the rate of annual growth in total permits seen since late
2012 has come to an end, but it is still too early to tell whether the trend is
poised to turn back up. That may be the case, as the latest National
Association of Home Builders/Wells Fargo Housing Market
Index (HMI) rose four points in August, to 59; this fourth consecutive
monthly gain brings the index to its highest level since November 2005. An
index value above 50 means more builders feel the market is good than feel it
is poor.
“Since
early summer, builders in many markets across the nation have been reporting
that buyer interest and traffic have picked up, which is a positive sign that
the housing market is moving in the right direction,” said NAHB Chairman Kevin
Kelly. However, “we are still not seeing much activity from first-time home
buyers,” said NAHB Chief Economist David Crowe. “Other factors impeding the
pace of the housing recovery include persistently tight credit conditions for
consumers and rising costs for materials, lots and labor.”
Based
on the observation that not-seasonally adjusted completions were nearly equal
to permits in August, Global Economic Intersection’s Steven Hansen believes
potential for future growth in the housing sector is limited. Also, “whenever
permits rate of growth is lower than completions,” Hansen
wrote, “this industry is decelerating.”
Click image
for larger view
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.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.