April 2019 Residential Permits, Starts and Completions

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After revisions to seasonally adjusted data back to January 2014, Census Bureau data showed builders started construction of privately-owned housing units in April at a seasonally adjusted annual rate (SAAR) of 1,235,000 units (1.200 million expected). This is 5.7% (±13.0%)* above the revised March estimate of 1,168,000 (originally 1.139 million units), but 2.5% (±10.4%)* below the April 2018 SAAR of 1,267,000 units; the not-seasonally adjusted YoY change (shown in the table above) was -2.9%.

Single-family housing starts in April were at a SAAR of 854,000; this is 6.2% (±13.7%)* above the revised March figure of 804,000 (-4.6% YoY). Multi-family starts: 381,000 units (+4.7% MoM; +1.5% 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 April were at a SAAR of 1,312,000 units. This is 1.4% (±15.5%)* below the revised March estimate of 1,331,000 (originally 1.313 million units), but 5.5% (±11.9%)* above the April 2018 SAAR of 1,244,000 units; the NSA comparison: +6.4% YoY.

Single-family housing completions were at a SAAR of 918,000; this is 4.1% (±13.4%)* below the revised March rate of 957,000 (+17.4% YoY). Multi-family completions: 394,000 units (+5.3% MoM; -13.4% YoY). 

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Total permits were at a SAAR of 1,296,000 units (1.290 million expected). This is 0.6% (±2.6%)* above the revised March rate of 1,288,000 (originally 1.269 million units), but 5.0% (±1.4%) below the April 2018 SAAR of 1,364,000 units; the NSA comparison: -0.5% YoY.

Single-family permits were at a SAAR of 782,000; this is 4.2% (±1.2%) below the revised March figure of 816,000 (-4.8% YoY). Multi-family: 514,000 (+8.9% MoM; +7.8% YoY). 

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Builder confidence in the market for newly-built single-family homes rose three points to 66 in May, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder sentiment is at its highest level since October 2018.

“Builders are busy catching up after a wet winter and many characterize sales as solid, driven by improved demand and ongoing low overall supply,” said NAHB Chairman Greg Ugalde. “However, affordability challenges persist and remain a big impediment to stronger sales.”

“Mortgage rates are hovering just above 4% following a challenging 4Q2018 when they peaked near 5%. This lower-interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace,” said NAHB Chief Economist Robert Dietz. “At the same time, builders continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability.”

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.