March 2015 Residential Permits, Starts and Completions

Click image for larger view 

Click image for larger view

Total housing starts increased in March, to a seasonally adjusted and annualized rate (SAAR) of 926,000 units (1.048 million expected). That level was 18,000 units higher (+2.0%) than February’s 908,000 units (revised up from 897,000). All of the increase in total starts occurred in the single-family component (26,000 units or +4.4%); multi-family starts fell by 8,000 units (-2.5%). 

Click image for larger view

The year-over-year percentage change in total starts slipped deeper into negative territory in March (-3.5%). Single-family starts were 3.8% below their year-earlier level, and -2.7% for the multi-family component. Not-seasonally adjusted year-to-date (YTD) comparisons to 2014 are still positive. 

Click image for larger view 

Click image for larger view

Completions also stumbled, falling by 33,000 units (-3.9%) in March, to 823,000 units SAAR. All of the decrease occurred in the multi-family component (38,000 units or -14.7%); the single-family component rose by 5,000 units (+0.8%). As was the case with starts, YTD completions are positive relative to 2014. 

Click image for larger view 

Click image for larger view

Total permits were a disappointment in March; they decreased by 63,000 units (-5.7%), to 1.039 million SAAR (1.085 million expected). All of the decrease occurred in the multi-family component (76,000 units or -15.9%); single-family permits rose (13,000 units or +2.1%). YTD total permits were 7.2% above the same months in 2014.

The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) shrugged off the negative permits and starts data when jumping four points in April (to 56). An index value above 50 means more builders feel the market is good than feel it is poor. “As the spring buying season gets underway, home builders are confident that current low interest rates and continued job growth will draw consumers to the market,” said NAHB Chair Tom Woods.

“The HMI component index measuring future sales expectations rose five points in April to its highest level of the year,” said NAHB Chief Economist David Crowe. “This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.” 

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.