June 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in June at a seasonally adjusted annual rate (SAAR) of 1,215,000 units (1.270 million expected). That is 8.3% (±15.8%)* above the revised May estimate of 1,122,000 (originally 1.092 million units) and 2.1% (±14.0%)* above the June 2016 SAAR of 1,190,000; the not-seasonally adjusted YoY change (shown in the table above) was +4.7%.

Single-family housing starts in June were at a SAAR of 849,000; that is 6.3% (±13.5%)* above the revised May figure of 799,000 and +10.8% YoY. Multi-family starts: 366,000 units (+13.3% MoM; -7.9% 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 1,203,000 units. That is 5.2% (±13.9%)* above the revised May estimate of 1,144,000 and 8.1% (±13.9%)* above the June 2016 SAAR of 1,113,000; the NSA comparison: +9.0% YoY.

Single-family housing completions were at a SAAR of 798,000; this is 0.4% (±11.0%)* above the revised May rate of 795,000 and +5.2% YoY. Multi-family completions: 405,000 units (+16.0% MoM; +16.9% YoY). 

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Total permits were at a SAAR of 1,254,000 (1.206 million expected). This is 7.4% (±1.1%) above the revised May rate of 1,168,000 and 5.1% (±1.4%) above the June 2016 rate of 1,193,000; the NSA comparison: +6.6% YoY.

Single-family authorizations were at a SAAR of 811,000; this is 4.1% (±0.8%) above the revised May figure of 779,000 and +8.9% YoY. Multi-family: 443,000 (+13.9% MoM; -2.6% YoY). 

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Builder confidence in the market for newly-built single-family homes slipped two points in July to a level of 64 from a downwardly revised June reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It is the lowest reading since November 2016.

“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

“The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand for new homes,” said NAHB Chief Economist Robert Dietz. “However, builders will need to manage some increasing supply-side costs to keep home prices competitive.”

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.