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Builders
initiated construction of privately-owned housing units at a
seasonally adjusted and annualized rate (SAAR) of 1.164 million units in May
(1.150 million expected).
That was 0.3 percent (±14.0%)* below the revised April estimate of 1.167
million (originally 1.172 million units). The multi-family component led the
decline: -5,000 units (-1.2%); single-family starts rose by 2,000 units, to a
rate of 764,000; that was 0.3 percent (±13.8%)* above the revised April figure
of 762,000 units.
* 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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May’s
total SAAR was 9.5 percent (±16.0%)* above the May 2015 rate of 1.063 million;
the not-seasonally adjusted YoY change (shown in the table above) was +9.6%. Single-family
starts were 10.1% higher YoY, while multi-family component was 8.8% higher.
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Total
completions rose by 48,000 units, or 5.1 percent (±15.5%)* to 988,000 units.
That was 3.5 percent (±13.1%)* below the May 2015 rate of 1.024 million; the
NSA comparison: -3.3% YoY.
The
MoM increase was concentrated in the multi-family component (+32,000 units, or 13.4%).
Single-family housing completions rose by 16,000 units, or 2.3 percent
(±14.8%)* to a SAAR of 717,000. Single-family completions were 10.1% above their
year-earlier NSA level, while the multi-family component was 27.9% lower.
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Total
permits increased by 8,000 units or 0.7 percent (±1.3%)* to 1.138 million
units. That SAAR was 10.1 percent (±1.8%)* below the May 2015 estimate of 1.266
million; the NSA comparison was -3.7% YoY.
The
MoM rise was limited to the multi-family component (+23,000 units or 5.9%). Single-family
permits decreased by 15,000 units or 2.0 percent (±0.9%) to 726,000 units. On a
YoY basis, single-family permits were 10.1% higher, but multi-family units were
21.6% lower; multi-family permits were also 13.0% lower YTD through May
than the same months in 2015.
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After
holding steady for the past four months, builder confidence in the market for
newly constructed single-family homes rose two points in June to a level of 60
on the National Association of Home Builders/Wells Fargo Housing Market Index
(HMI). This is the highest reading since January 2016.
“Builders
in many markets across the nation are reporting higher traffic and more
committed buyers at their job sites,” said NAHB Chairman Ed Brady. “However,
our members are also relating ongoing concerns regarding the shortage of
buildable lots and labor and noting pockets of softness in scattered markets.”
“Rising
home sales, an improving economy and the fact that the HMI gauge measuring
future sales expectations is running at an eight-month high are all positive
factors indicating that the housing market should continue to move forward in
the second half of 2016,” said NAHB Chief Economist Robert Dietz.
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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