July 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in July at a seasonally adjusted annual rate (SAAR) of 1,155,000 units (1.225 million expected). This is 4.8% (±10.2%)* below the revised June estimate of 1,213,000 (originally 1.215 million units) and 5.6% (±8.5%)* below the July 2016 SAAR of 1,223,000; the not-seasonally adjusted YoY change (shown in the table above) was -5.4%.

Single-family housing starts in July were at a SAAR of 856,000; this is 0.5% (±8.5%)* below the revised June figure of 860,000 and 11.7% YoY. Multi-family starts: 299,000 units (-15.3% MoM; -34.5% 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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Privately-owned housing completions amounted to 1,175,000 units. This is 6.2% (±14.3%)* below the revised June estimate of 1,252,000, but 8.2% (±12.6%)* above the July 2016 rate of 1,086,000; the NSA comparison: +7.6% YoY.

Single-family completions in July were at a rate of 814,000; this is 1.6% (±11.9%)* below the revised June rate of 827,000 but +9.2% YoY. Multi-family completions: 361,000 units (-15.1% MoM; +4.7% YoY). 

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Total permits were at a SAAR of 1,223,000 units (1.246 million expected). This is 4.1% (±0.9%) below the revised June rate of 1,275,000, but 4.1% (±1.8%) above the July 2016 SAAR of 1,175,000; the NSA comparison: +2.6% YoY.

Single-family authorizations were at a rate of 811,000; this is unchanged from the revised June figure of 811,000 and +12.9% YoY. Multi-family: 412,000 (-11.2% MoM; -14.7% YoY). 

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Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”

“The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,” said NAHB Chief Economist Robert Dietz. “GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.”

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.