May 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in May at a seasonally adjusted annual rate (SAAR) of 1,269,000 units (1.240 million expected). This is 0.9% (±12.9%)* below the revised April estimate of 1,281,000 (originally 1.235 million units) and 4.7% (±8.9%)* below the May 2018 SAAR of 1,332,000 units; the not-seasonally adjusted YoY change (shown in the table above) was -4.0%.

Single-family housing starts in May were at a SAAR of 820,000; this is 6.4% (±9.5%)* below the revised April figure of 876,000 (-11.7% YoY). Multi-family starts: 449,000 units (+10.9% MoM; +15.4% 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 May were at a SAAR of 1,213,000 units. This is 9.5% (±13.7%)* below the revised April estimate of 1,340,000 (originally 1.312 million units) and 2.8% (±9.1%)* below the May 2018 SAAR of 1,248,000 units; the NSA comparison: -4.1% YoY.

Single-family completions were at a SAAR of 890,000; this is 5.0% (±12.7%)* below the revised April rate of 937,000 (+1.1% YoY). Multi-family completions: 323,000 units (-19.9% MoM; -16.1% YoY). 

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Total permits were at a SAAR of 1,294,000 units (1.290 million expected). This is 0.3% (±1.3%)* above the revised April rate of 1,290,000 (originally 1.296 million units), but 0.5% (±1.4%)* below the May 2018 SAAR of 1,301,000 units; the NSA comparison: -0.8% YoY.

Single-family permits were at a SAAR of 815,000; this is 3.7% (±1.2%) above the revised April figure of 786,000 (-3.8% YoY). Multi-family: 479,000 (-5.0% MoM; +5.4% YoY). 

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Builder confidence in the market for newly-built single-family homes fell two points to 64 in June, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Sentiment levels have held at a solid range in the low- to mid-60s for the past five months.

“While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” said NAHB Chairman Greg Ugalde.

“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” said NAHB Chief Economist Robert Dietz. “And while new home sales picked up in March and April, builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply.”

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.