January 2018 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in January at a seasonally adjusted annual rate (SAAR) of 1,326,000 units (1.230 million expected). This is 9.7% (±16.8%)* above the revised December estimate of 1,209,000 (originally 1.192 million units) and 7.3% (±15.0%)* above the January 2017 SAAR of 1,236,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +9.5%.

Single-family housing starts in January were at a SAAR of 877,000; this is 3.7% (±9.7%)* above the revised December figure of 846,000 (+9.2% YoY). Multi-family starts: 449,000 units (+23.7% MoM; +9.9% 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 a SAAR of 1,166,000 units. This is 1.9% (±7.8%)* below the revised December estimate of 1,188,000, but 7.7% (±11.9%)* above the January 2017 SAAR of 1,083,000 units; the NSA comparison: +6.8% YoY.

Single-family housing completions were at a SAAR of 850,000; this is 2.2% (±8.3%)* above the revised December rate of 832,000 (+6.0% YoY). Multi-family completions: 316,000 units (-11.2% MoM; +9.2% YoY). 

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Total permits were at a SAAR of 1,396,000 units (1.300 million expected). This is 7.4% (±1.2%) above the revised December rate of 1,300,000 and is 7.4% (±1.9%) above the January 2017 SAAR of 1,300,000 units; the NSA comparison: +12.4% YoY.

Single-family authorizations in January were at a SAAR of 866,000; this is 1.7% (±1.3%) below the revised December figure of 881,000 (+14.0% YoY). Multi-family: 530,000 (+26.5% MoM; +9.8% YoY). 

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Builder confidence in the market for newly-built single-family homes remained unchanged at a “healthy” 72 level in February on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth,” said NAHB Chairman Randy Noel. “However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases.”

“The HMI gauge of future sales expectations has reached a post-recession high, an indicator that consumer demand for housing should grow in the months ahead,” said NAHB Chief Economist Robert Dietz. “With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace.”

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.