August 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in August at a seasonally adjusted annual rate (SAAR) of 1,180,000 units (1.173 million expected). This is 0.8% (±9.6%)* below the revised July estimate of 1,190,000 (originally 1.115 million units), but 1.4% (±8.9%)* above the August 2016 SAAR of 1,164,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +0.5%.

Single-family housing starts in August were at a SAAR of 851,000; this is 1.6% (±9.0%)* above the revised July figure of 838,000 and +14.4% YoY. Multi-family starts: 329,000 units (-6.5% MoM; -25.1% 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 completions amounted to 1,075,000 units. This is 10.2% (±12.3%)* below the revised July estimate of 1,197,000, but 3.4% (±13.0%)* above the August 2016 SAAR of 1,040,000; the NSA comparison: +3.1% YoY.

Single-family housing completions were at a rate of 724,000; this is 13.3% (±14.7%)* below the revised July rate of 835,000 and -3.8% YoY. Multi-family completions: 351,000 units (-3.0% MoM; +17.2% YoY). 

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Total permits were at a SAAR of 1,300,000 units (1.220 million expected). This is 5.7% (±2.0%) above the revised July rate of 1,230,000 and 8.3% (±1.6%) above the August 2016 SAAR of 1,200,000; the NSA comparison: +9.9% YoY.

Single-family authorizations were at a rate of 800,000; this is 1.5% (±1.3%) below the revised July figure of 812,000 but +7.3% YoY. Multi-family: 500,000 (+19.6% MoM; +14.4% YoY). 

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Builder confidence in the market for newly-built single-family homes fell three points to a level of 64 in September from a downwardly revised August reading of 67 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald. “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”

“Despite this month’s drop, builder confidence is still on very firm ground,” said NAHB Chief Economist Robert Dietz. “With ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year.”

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.