June 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in June at a seasonally adjusted annual rate (SAAR) of 1,253,000 units (1.260 million expected). This is 0.9% (±7.9%)* below the revised May estimate of 1,265,000 (originally 1.269 million units), but 6.2% (±7.8%)* above the June 2018 SAAR of 1,180,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +4.9%.

Single-family housing starts in June were at a SAAR of 847,000; this is 3.5% (±9.6%)* above the revised May figure of 818,000 (-2.3% YoY). Multi-family starts: 406,000 units (-9.2% MoM; +26.0% 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 June were at a SAAR of 1,161,000 units. This is 4.8% (±12.8%)* below the revised May estimate of 1,220,000 (originally 1.213 million units) and 3.7% (±10.5%)* below the June 2018 SAAR of 1,205,000 units; the NSA comparison: -4.9% YoY.

Single-family housing completions were at a SAAR of 870,000; this is 1.8% (±11.5%)* below the revised May rate of 886,000 (+0.5% YoY). Multi-family completions: 291,000 units (-12.9% MoM; -17.3% YoY). 

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Total permits amounted to a SAAR of 1,220,000 units (1.300 million expected). This is 6.1% (±1.2%) below the revised May rate of 1,299,000 (originally 1.294 million units) and 6.6% (±1.1%) below the June 2018 SAAR of 1,306,000 units; the NSA comparison: -10.7% YoY.

Single-family permits were at a SAAR of 813,000; this is 0.4% (±1.0%)* above the revised May figure of 810,000 (-9.4% YoY). Multi-family: 407,000 (-16.8% MoM; -13.3% YoY). 

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Builder confidence in the market for newly-built single-family homes rose one point to 65 in July, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This marks the sixth consecutive month that sentiment levels have held at a steady range in the low- to mid-60s.

“Builders report solid demand for single-family homes. However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes,” said NAHB Chairman Greg Ugalde.

“Even as builders try to rein in costs, home prices continue to outpace incomes,” said NAHB Chief Economist Robert Dietz. “The current low mortgage interest rate environment should be getting more buyers off the sidelines, but they remain hesitant due to affordability concerns. Still, attractive rates should help spur new home purchases in large metro suburban markets, where approximately one-third of new construction takes place.”

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.