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Total
housing starts rocketed
higher in April, to a seasonally adjusted and annualized rate (SAAR) of 1.135
million units (1.029 million expected).
That level was 191,000 units higher (+20.2%) than March’s 944,000 units
(revised up from the original 926,000), the second-largest jump in the data
series. The increase in total starts was split as follows -- single-family: +105,000
units (16.7%); multi-family: +86,000 units (27.2%).
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The
year-over-year percentage change in total starts bounced “back into the black” in
April (+9.2%). Single-family starts were 13.8% above their year-earlier level,
while the multi-family component nudged up to +0.9%. Not-seasonally adjusted
year-to-date (YTD) comparisons to 2014 improved in all but the multi-family
component relative to April’s results. We would observe, however, that the annual
(i.e., year-over-year) percentage change in total starts has not yet broken off
its downward trend present since 2013.
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Completions
also jumped, rising by 167,000 units (+20.4%) in April, to 986,000 units SAAR. The
increase was about evenly split -- single-family: +87,000 units (14.5%); multi-family:
+80,000 units (36.7%). As was the case with starts, YTD completions are
positive relative to 2014, and rose “across the board” relative to April’s
results.
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Total
permits rounded out the positives in April when increasing by 105,000 units (+10.1%),
to 1.143 million SAAR (1.070 million expected). The multi-family component dominated
in April: +81,000 units (20.5%); single-family: +24,000 units (3.7%). YTD total
permits were 5.4% above the same months in 2014; except for the multi-family component,
permits were higher than April’s results.
Despite
the apparent increase in residential construction activity, the latest National
Association of Home Builders/Wells Fargo Housing Market Index
(HMI) dipped by two points in May (to 54). An index value above 50 means more
builders feel the market is good than feel it is poor. “Despite this month’s
slight dip, builder confidence in the new home market remains above the
50-point benchmark,” said NAHB Chair Tom Woods. “Overall, the second quarter of
2015 is shaping up to be very solid.”
“Consumers
are exhibiting caution, and want to be on more stable financial footing before
purchasing a home,” said NAHB Chief Economist David Crowe. “On the bright side,
the HMI component measuring future sales expectations has been tracking upward
all year, mortgage rates remain low, and house prices are affordable. These
factors should spur the release of pent-up demand moving forward.”
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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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