May 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in May at a seasonally adjusted annual rate (SAAR) of 1,092,000 units (1.221 million expected). That was 5.5% (±11.9%)* below the revised April estimate of 1,156,000 (originally 1.172 million units) and 2.4% (±11.4%)* below the May 2016 SAAR of 1,119,000; the not-seasonally adjusted YoY change (shown in the table above) was -2.6%.

Single-family housing starts in May were at a SAAR of 794,000; that is 3.9% (±10.4%)* below the revised April figure of 826,000 but +9.4% YoY. Multi-family starts: 298,000 units (-9.7% MoM; -26.7% 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 completions amounted to 1,164,000 units. That was 5.6% (±9.2%)* above the revised April estimate of 1,102,000 and 14.6% (±10.9%) above the May 2016 SAAR of 1,016,000; the NSA comparison: +15.8% YoY.

Single-family completions were at a SAAR of 817,000; that was 4.9% (±11.6%)* above the revised April rate of 779,000 and +14.0% YoY. Multi-family completions: 347,000 units (+7.4% MoM; +20.6% YoY). 

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Total permits were at a SAAR of 1,168,000 (1.249 million expected). This is 4.9% (±0.9%) below the revised April rate of 1,228,000 (originally 1.229 million) and 0.8% (±1.1%)* below the May 2016 SAAR of 1,178,000; the NSA comparison: +2.4% YoY.

Single-family permits: 779,000; this is 1.9% (±1.0%) below the revised April figure of 794,000 but +10.9% YoY. Multi-family: 389,000 (-10.4% MoM; -14.6% YoY). 

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Builder confidence in the market for newly-built single-family homes weakened slightly in June, down two points to a level of 67 from a downwardly revised May reading of 69 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Builder confidence levels have remained consistently sound this year, reflecting the ongoing gradual recovery of the housing market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. 

“As the housing market strengthens and more buyers enter the market, builders continue to express their frustration over an ongoing shortage of skilled labor and buildable lots that is impeding stronger growth in the single-family sector,” 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.