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Total
housing starts settled in May, to a seasonally adjusted and annualized rate (SAAR) of 1.036
million units (1.090 million expected).
That level was 129,000 units lower (-11.1%) than April’s 1.165 million units. The
decrease in total starts was split as follows -- single-family: -39,000 units (5.4%);
multi-family: -90,000 units (20.2%).
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Total
starts were 4.6% above their year-earlier level (single-family: +6.7%;
multi-family: +0.6%). Not-seasonally adjusted year-to-date (YTD) comparisons to
2014 were pared back in all components relative to May’s results. We would
observe, also, 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
rose by 46,000 units (+4.7%) in May, to 1.034 million units SAAR. The increase was
limited to the multi-family component (+81,000 or 25.5%); single-family dropped
35,000 units (-5.2%). As was the case with starts, YTD completions are positive
relative to 2014.
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Total
permits jumped higher in May, by 135,000 units (+11.8%), to 1.275 million SAAR
(1.105 million expected). The multi-family component dominated in May: +118,000
units (24.9%); single-family: +17,000 units (2.6%). YTD total permits were 8.8%
above the same months in 2014, driven by the multi-family component (+14.4%).
The
latest National Association of Home Builders/Wells Fargo Housing Market Index
(HMI) rose by five points in June (to 59). An index value above 50 means more
builders feel the market is good than feel it is poor. “Builders are reporting
more serious and committed buyers at their job sites and this is reflected in
recent government data showing that new-home sales and single-family
construction are gaining momentum,” said NAHB Chairman Tom Woods.
“The
HMI indices measuring current and future sales expectations are at their
highest levels since the last quarter of 2005, indicating a growing optimism
among builders that housing will continue to strengthen in the months ahead,”
said NAHB Chief Economist David Crowe. “At the same time, builders remain
sensitive to consumers’ ability to buy a new home.”
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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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