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Thursday, September 17, 2015

August 2015 Residential Permits, Starts and Completions

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Total housing starts declined in August to a seasonally adjusted and annualized rate (SAAR) of 1.126 million units (1.168 million expected) -- comparable to activity previously seen in November 2007. August’s level was 35,000 units below (-3.0% ±11.3%*) July’s 1.160 million units (revised from 1.206 million). The decrease in total starts was split as follows -- single-family: -23,000 units (-3.0% ±9.5%*); multi-family: -12,000 units (-3.0%).
* 90% confidence interval (CI) is not statistically different from zero. The Census Bureau does not publish CIs for the entire multi-unit category. 
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Total starts were 15.9% above their not-seasonally adjusted year-earlier level (single-family: +15.3%; multi-family: +17.0%). Year-to-date (YTD) comparisons to 2014 were all in the +11% range. 
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Completions fell by 61,000 units (-6.1% ±12.5%*) in August, to 935,000 units SAAR. The decrease was limited to the multi-family component (-71,000 units or 19.7%); single-family completions rose by 10,000 units (1.6% ±11.0%*). 
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Total permits partially recouped in August ground lost in July in the wake of a New York City apartment construction tax incentive that expired in mid-June. August permits rose by 40,000 units (+3.5% ±1.4%) to 1.170 million SAAR (1.160 million expected). The absolute increase was about evenly split between the components -- single-family: +19,000 units (+2.8% ±1.7%); multi-family: +21,000 units (+4.7%). YTD total permits were 12.2% above the same months in 2014, driven by the multi-family component (+21.1%).
The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) ticked up to 62 (+1 point) in September -- the highest level since October 2005. (An HMI value above 50 means more builders feel the market is good than feel it is poor.) “The HMI shows that single-family housing is making solid progress,” said NAHB Chairman Tom Woods. “However, our members continue to tell us that they are concerned about the availability of lots and labor.”
“NAHB is projecting about 1.1 million total housing starts this year,” said Chief Economist David Crowe. “Today's report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.” 
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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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