April 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in April at a seasonally adjusted annual rate (SAAR) of 1,172,000 units (1.256 million expected). That is 2.6% (±8.8%)* below the revised March estimate of 1,203,000 (originally 1.215 million units), but 0.7% (±7.0%)* above the April 2016 SAAR of 1,164,000; the not-seasonally adjusted YoY change (shown in the table above) was +0.4%.

Single-family housing starts in April were at a rate of 835,000 units; that is 0.4% (±8.6%)* above the revised March figure of 832,000 and +7.6% YoY. Multi-family starts: 337,000 units (-9.2% MoM; -15.1% YoY).

* 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 were at a SAAR of 1,106,000 units. That is 8.6% (±10.8%)* below the revised March estimate of 1,210,000, but 15.1% (±12.2%) above the April 2016 SAAR of 961,000; the NSA comparison: +14.1% YoY.

Single-family housing completions were at a SAAR of 784,000; this is 4.5% (±10.6%)* below the revised March rate of 821,000 but +9.2% YoY. Multi-family completions: 322,000 units (-17.2% MoM; +29.1% YoY). 

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Total building permits were at a SAAR of 1,229,000 units (1.271 million expected). That is 2.5% (±1.1%) below the revised March rate of 1,260,000 units (originally 1.260 million), but 5.7% (±1.4%) above the April 2016 SAAR of 1,163,000; the NSA comparison: +1.0% YoY.

Single-family authorizations in April were at a rate of 789,000; this is 4.5% (±0.8%) below the revised March figure of 826,000 but +0.9% YoY. Multi-family: 440,000 (+1.4% MoM; +1.2% YoY). 

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Builder confidence in the market for newly-built single-family homes rose two points in May to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the second highest HMI reading since the Great Recession’s downturn.

“This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor,” said NAHB Chairman Granger MacDonald.

“The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market,” said NAHB Chief Economist Robert Dietz. “Especially as existing home inventory remains tight, we can expect increased demand for new construction 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.