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Wednesday, January 20, 2016

December 2015 Residential Permits, Starts and Completions

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Builders started 1.149 million residential units (SAAR) in December (1.200 million expected). That is 2.5% (±8.6%)* below the revised November estimate of 1.179 million units (originally 1.173 million). The MoM decrease was most obvious in the single-family component. Single-family starts were at a rate of 768,000, or 3.3% (±8.5%)* below the revised November figure of 794,000. Multi-family starts were estimated to be 381,000 units (-4,000 or 1.0%).
* 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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December’s SAAR was 6.4% (±12.2%)* above the year-earlier SAAR of 1,080 million. The not-seasonally adjusted (NSA) YoY comparison (shown in the table above) is +5.6%. Single-family starts were +5.0%; multi-family: +6.7%.
An estimated 1.111 housing units were started in 2015, or 10.8% (±2.9%) above the 2014 figure of 1.003 million starts. Year-to-date (YTD) comparisons ranged between 10.4 and 11.4%. 
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Completions rose by 54,000 units in December, to a SAAR of 1.013 million. That is 5.6% (±10.5%)* above the revised November estimate of 959,000 and 7.9% (±11.6%)* above the year-earlier SAAR of 939,000 units. The NSA estimate was +4.8% YoY.
All of the MoM increase occurred in the single-family component. Single-family completions rose by 56,000 units, to 696,000. That is 8.8% (±12.2%)* above the revised November rate of 640,000 and +5.6% YoY (NSA). Multi-family completions edged down by 0.6%, to 307,000 (but +2.8 YoY NSA).
An estimated 965,700 housing units were completed in 2015, or 9.3% (±3.8%) above the 2014 figure of 883,800. 
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Total permits in December were at a SAAR of 1.232 million units (1.217 million expected). That is 3.9% (±2.2%) below the revised November rate of 1.282 million (originally 1.289 million), but 14.4% (±1.2%) above the year-earlier SAAR estimate of 1.077 million (+17.4% YoY NSA).
All of the MoM decline in permits was concentrated in the multi-family component, as single-family authorizations rose by 13,000 units, to a rate of 740,000 (1.8% ±2.2%* above the revised November figure of 727,000). Multi-family authorizations fell by 11.4% (to 492,000 units).
An estimated 1.173 million residential building permits were issued in 2015, 11.5% (±1.8%) above the year-earlier SAAR of 1.052 million units.
Builder confidence in the market for newly-built single-family homes held steady at 60 in January from a downwardly revised December reading of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index. Any number over 50 indicates that more builders view conditions as “good” than “poor.”
“After eight months hovering in the low 60s, builder sentiment is reflecting that many markets continue to show a gradual improvement, which should bode well for future home sales in the year ahead,” said NAHB Chairman Tom Woods.  “January’s HMI reading is right in line with our forecast of modest growth for housing,” added NAHB Chief Economist David Crowe. “The economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move 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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