February 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in February at a seasonally adjusted annual rate (SAAR) of 1,162,000 units. This is 8.7% (±10.3%)* below the revised January estimate of 1,273,000 (originally 1.230 million units) and 9.9% (±11.5%)* below the February 2018 SAAR of 1,290,000 units; the not-seasonally adjusted YoY change (shown in the table above) was -9.4%.

Single-family housing starts in February were at a SAAR of 805,000; this is 17.0% (±11.2%) below the revised January figure of 970,000 (-10.7% YoY). Multi-family starts: 357,000 units (+17.8% MoM; -6.2% 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 February were at a SAAR of 1,303,000. This is 4.5% (±17.8%)* above the revised January estimate of 1,247,000 (originally 1.244 million units) and 1.1% (±18.6%)* above the February 2018 SAAR of 1,289,000 units; the NSA comparison: +2.0% YoY.

Single-family housing completions in February were at a SAAR of 816,000; this is 10.0% (±11.0%)* below the revised January rate of 907,000 (-7.5% YoY). Multi-family completions: 487,000 units (+43.2% MoM; +23.4% YoY). 

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Total permits were at a SAAR of 1,296,000 units. This is 1.6% (±1.2%) below the revised January rate of 1,317,000 (originally 1.345 million units) and 2.0% (±1.7%) below the February 2018 SAAR of 1,323,000 units; the NSA comparison: -2.1% YoY.

Single-family permits were at a rate of 821,000; this is unchanged (±0.7%)* from the revised January figure of 821,000 (-7.2% YoY). Multi-family: 475,000 (-4.2% MoM; +8.7% YoY). 

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Builder confidence in the market for newly-built single-family homes held steady at 62 in March, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

“Builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season,” said NAHB Chairman Greg Ugalde.

“In a healthy sign for the housing market, more builders are saying that lower price points are selling well, and this was reflected in the government’s new home sales report released last week,” said NAHB Chief Economist Robert Dietz. “Increased inventory of affordably priced homes -- in markets where government policies support such construction -- will enable more entry-level buyers to enter the market.”

However, affordability still remains a key concern for builders. The skilled worker shortage, lack of buildable lots and stiff zoning restrictions in many major metro markets are among the challenges builders face as they strive to construct homes that can sell at affordable price points.

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.