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Thursday, February 16, 2017

January 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in January at a seasonally adjusted annual rate (SAAR) of 1.246 million units (1.232 million expected). This is 2.6 percent (±11.0%)* below the revised December estimate of 1.279 million (originally 1.226 million), but 10.5 percent (±15.3%)* above the January 2016 SAAR of 1.128 million; the not-seasonally adjusted YoY change (shown in the table above) was +11.0%.
* 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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The multi-family segment led the MoM decrease: -48,000 units (-10.2%), to 423,000 units. Single-family rose by 15,000 units, or +1.9 percent (±10.8%)* to 823,000 units. 
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Total housing completions in January declined by 62,000 units, or -5.6 percent (±8.0%)* to 1.047 million units. That is 0.9 percent (±15.0%)* below the January 2016 SAAR of 1.056 million; the NSA comparison: -0.6% YoY. 
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Single-family housing completions rose by 33,000 units, or +4.3 percent (±7.5%)* to 800,000 units. Multi-family completions tumbled by 95,000 units, or -27.8%, to 247,000 units. 
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Total permits rose by 57,000 units, or +4.6 percent (±2.0%) to 1.285 million units (1.233 million expected). That is 8.2 percent (±1.6%) above the January 2016 SAAR of 1.188 million; the non-seasonally adjusted YoY comparison was +16.0%.
Single-family fell by 22,000 units, or -2.7 percent (±1.9%) to 808,000 units. Multi-family permits: +79,000 units, or +19.8%, to 477,000 units. 
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Builder confidence in the market for newly-built single-family homes declined two points in February to a level of 65 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
“While builders remain optimistic, we are seeing the numbers settling back into a normal range,” said NAHB Chairman Granger MacDonald. “Regulatory burdens remain a major challenge to our industry, and NAHB looks forward to working with the new Congress and administration to help alleviate some of the pressures that are holding small businesses back and making homes less affordable.”
“With much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages,” said NAHB Chief Economist Robert Dietz. “Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed.”
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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