March 2018 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in March at a seasonally adjusted annual rate (SAAR) of 1,319,000 units (1.269 million expected). This is 1.9% (±12.4%)* above the revised February estimate of 1,295,000 (originally 1.236 million units) and 10.9% (±10.0%) above the March 2017 SAAR of 1,189,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +10.1%.

Single-family housing starts in March were at a SAAR of 867,000; this is 3.7% (±11.8%)* below the revised February figure of 900,000 (but +2.9% YoY). Multi-family starts: 452,000 units (+14.4% MoM; +28.3% 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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Completions in March were at a SAAR of 1,217,000 units. This is 5.1% (±16.0%)* below the revised February estimate of 1,282,000, but 1.9% (±13.4%)* above the March 2017 SAAR of 1,194,000 units; the NSA comparison: +1.7% YoY.

Single-family housing completions in March were at a rate of 840,000; this is 4.7% (±12.3%)* below the revised February rate of 881,000 (+3.5% YoY). Multi-family completions: 377,000 units (-6.0% MoM; -2.0% YoY). 

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Total permits in March were authorized at a SAAR of 1,354,000 units (1.311 million expected). This is 2.5% (±1.4%) above the revised February rate of 1,321,000 (originally 1.298 million units) and 7.5% (±1.4%) above the March 2017 SAAR of 1,260,000 units; the NSA comparison: +2.5% YoY.

Single-family authorizations in March were at a SAAR of 840,000; this is 5.5% (±1.5%) below the revised February figure of 889,000 (-3.0% YoY). Multi-family: 514,000 (+19.0% MoM; +14.4% YoY). 

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Builder confidence in the market for newly-built single-family homes edged down one point to a level of 69 in April on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains on firm ground.

“Strong demand for housing is keeping builders optimistic about future market conditions,” said NAHB Chairman Randy Noel. “However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs placed on Canadian lumber and other imported products are pushing up prices and hurting housing affordability.”

“Ongoing employment gains, rising wages and favorable demographics should spur demand for single-family homes in the months ahead,” said NAHB Chief Economist Robert Dietz. “The minor dip in builder confidence this month is likely due to winter weather effects, which may be slowing housing activity in some pockets of the country. As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual 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.