October 2017 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in October at a seasonally adjusted annual rate (SAAR) of 1,290,000 units (1.188 million expected). That is 13.7% (±10.5%) above the revised September estimate of 1,135,000 (originally 1.127 million units), but 2.9% (±10.1%)* below the October 2016 SAAR of 1,328,000 units; the not-seasonally adjusted YoY change (shown in the table above) was -1.9%.

Single-family housing starts in October were at a SAAR of 877,000; this is 5.3% (±12.1%)* above the revised September figure of 833,000 and +2.0% YoY. Multi-family starts: 413,000 units (+36.8% MoM; -9.0% 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 1,232,000 units. That is 12.6% (±12.2%) above the revised September estimate of 1,094,000 and 15.5% (±11.7%) above the October 2016 SAAR of 1,067,000; the NSA comparison: +15.4% YoY.

Single-family housing completions were at a SAAR of 793,000; that is 2.6% (±11.1%)* above the revised September rate of 773,000 and +4.9% YoY. Multi-family completions: 439,000 units (+36.8% MoM; +43.1% YoY). 

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Total permits were at a SAAR of 1,297,000 units (1.245 million expected). That is 5.9% (±1.4%) above the revised September rate of 1,225,000 and 0.9% (±1.6%)* above the October 2016 SAAR of 1,285,000 units; the NSA comparison: +7.8 YoY.

Single-family authorizations were at a rate of 839,000; this is 1.9% (±1.7%) above the revised September figure of 823,000 and +13.3% YoY. Multi-family: 458,000 (+13.9% MoM; -0.2% YoY). 

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Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in November on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest report since March, and the second highest on record since July 2005.

“November’s builder confidence reading is close to a post-recession high -- a strong indicator that the housing market continues to grow steadily,” said NAHB Chairman Granger MacDonald. “However, our members still face supply-side constraints, such as lot and labor shortages and ongoing building material price increases.”

“Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory,” said NAHB Chief Economist Robert Dietz. “With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017.” 

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.