September 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in September at a seasonally adjusted annual rate (SAAR) of 1,127,000 units (1.170 million expected). That is 4.7% (±8.1%)* below the revised August estimate of 1,183,000 (originally 1.180 million units), but 6.1% (±8.8%)* above the September 2016 SAAR of 1,062,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +6.6%.

Single-family housing starts in September were at a rate of 829,000; this is 4.6% (±8.5%)* below the revised August figure of 869,000 and +7.3% YoY. Multi-family starts: 298,000 units (-5.1% MoM; +5.1% 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 a SAAR of 1,109,000. This is 1.1% (±12.4%)* above the revised August estimate of 1,097,000 and 10.3% (±11.9%)* above the September 2016 SAAR of 1,005,000 units; the NSA comparison: +10.1% YoY.

Single-family housing completions in September were at a rate of 781,000; this is 4.6% (±11.4%)* above the revised August rate of 747,000 and +8.9% YoY. Multi-family completions: 328,000 units (-6.3% MoM; +12.8% YoY). 

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Total permits were at a SAAR of 1,215,000 units (1.230 million expected). This is 4.5% (±1.6%) below the revised August rate of 1,272,000 and is 4.3% (±1.7%) below the September 2016 SAAR of 1,270,000 units; the NSA comparison: -10% YoY.

Single-family authorizations in September were at a rate of 819,000; this is 2.4% (±1.7%) above the revised August figure of 800,000 but +4.6% YoY. Multi-family: 396,000 (-16.1% MoM; -29.2% YoY). 

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

“This month’s report shows that home builders are rebounding from the initial shock of the hurricanes,” said NAHB Chairman Granger MacDonald. “However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages.” 

“It is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer,” said NAHB Chief Economist Robert Dietz. “With a tight inventory of existing homes and promising growth in household formation, we can expect the new home market continue to strengthen at a modest rate in the months ahead.”

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.