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Thursday, May 19, 2016

April 2016 Residential Permits, Starts and Completions

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Privately owned housing starts in April were at a seasonally adjusted annual rate (SAAR) of 1.172 million (1.135 million expected). That was 6.6 percent (±10.2%)* above the revised March estimate of 1,099 million (originally 1.089 million). Most of the increase was in the multi-family category: +48,000 units (13.9%); single-family rose by 25,000 units, to a rate of 778,000; that was 3.3 percent (±12.1%)* above the revised March figure of 753,000.
* 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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April’s total SAAR was 1.7 percent (±10.1%)* below the April 2015 rate of 1.192 million; the not-seasonally adjusted YoY change (shown in the table above) was -0.5%. Single-family starts were 6.2% higher YoY, while multi-family component was 12.3% lower. Equally noteworthy, multi-family starts YTD through April were 1.8% below the same months in 2015. 
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Total completions fell by 115,000 units, or 11.0 percent (±12.3%)* to 933,000 units. That was 7.4 percent (±10.6%)* below the April 2015 SAAR of 1.008 million; the NSA comparison: -5.8% YoY.
The MoM decline was concentrated in the multi-family component (-89,000 units, or -26.9%). Single-family housing completions fell by 26,000 units, or 3.6 percent (±12.6%)* to a SAAR of 691,000. Single-family completions were 2.1% above their year-earlier NSA level, while the multi-family component was 23.5% lower. 
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Total permits increased by 39,000 units or 3.6 percent (±1.3%) to 1.116 million units. That SAAR was 5.3 percent (±1.3%) below the April 2015 level; the NSA comparison was -7.2% YoY.
The MoM rise was concentrated in the multi-family component (+28,000 units or 8.0%). Single-family permits increased by 11,000 units or 1.5 percent (±0.8%) to 736,000 units. On a YoY basis, single-family permits were 3.5% higher, but multi-family units were 24.3% lower; multi-family permits were also 10.6% lower YTD through April than the same months in 2015. 
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Builder confidence in the market for newly-built single-family homes was unchanged at 58 in May on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
“Builder confidence has held steady at 58 for four straight months, which indicates that the single-family housing sector remains in positive territory,” said NAHB Chairman Ed Brady.  “However, builders are facing an increasing number of regulations and lot supply constraints.”
The HMI components measuring sales expectations in the next six months increased three points to 65, while the component charting current sales conditions and the index gauging buyer traffic both held steady at 63 and 44, respectively.
“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” said NAHB Chief Economist Robert Dietz. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”
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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