February 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in February at a seasonally adjusted annual rate (SAAR) of 1,288,000 units (1.266 million expected). This is 3.0 percent (±13.0 percent)* above the revised January estimate of 1,251,000 (originally 1.246 million units) and 6.2 percent (±10.4 percent)* above the February 2016 SAAR of 1,213,000; the not-seasonally adjusted YoY change (shown in the table above) was +3.6%.

Single-family housing starts in February were at a SAAR of 872,000; this is 6.5 percent (±10.9 percent)* above the revised January figure of 819,000. The February SAAR for multi-family starts was 416,000.

* 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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Total housing completions in February were at a SAAR of 1,114,000 units. This is 5.4 percent (±9.6 percent)* above the revised January estimate of 1,057,000 and 8.7 percent (±12.1 percent)* above the February 2016 SAAR of 1,025,000; the NSA comparison: +5.2% YoY.

Single-family housing completions were at a SAAR of 754,000; this is 6.5 percent (±9.7 percent)* below the revised January rate of 806,000. Multi-family completions: 360,000 (+43.4% MoM). 

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Total building permits were at a SAAR of 1,213,000 (1.267 million expected). This is 6.2 percent (±1.8 percent) below the revised January rate of 1,293,000 units (originally 1.285 million), but 4.4 percent (±1.3 percent) above the February 2016 SAAR of 1,162,000; the non-seasonally adjusted YoY comparison was +0.0%.

Single-family permits: 832,000; this is 3.1 percent (±1.5 percent) above the revised January figure of 807,000. Multi-family: 381,000 (-21.6% MoM). 

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Builder confidence in the market for newly-built single-family homes jumped six points to a level of 71 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since June 2005.

“Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said NAHB Chairman Granger MacDonald.

“While builders are clearly confident, we expect some moderation in the index moving forward,” said NAHB Chief Economist Robert Dietz. “Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.”

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.