July 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in July at a seasonally adjusted annual rate (SAAR) of 1,191,000 units (1.260 million expected). This is 4.0% (±8.0%)* below the revised June estimate of 1,241,000 (originally 1.253 million units), but is 0.6% (±8.2%)* above the July 2018 SAAR of 1,184,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +1.6%.

Single-family housing starts in July were at a SAAR of 876,000; this is 1.3% (±11.8%)* above the revised June figure of 865,000 (+3.7% YoY). Multi-family starts: 315,000 units (-16.2% MoM; -4.0% 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 July were at a SAAR of 1,250,000 units. This is 7.2% (±11.4%)* above the revised June estimate of 1,166,000 (originally 1.161 million units) and 6.3% (±12.0%)* above the July 2018 SAAR of 1,176,000 units; the NSA comparison: +6.1% YoY.

Single-family housing completions were at a SAAR of 918,000; this is 4.3% (±10.8%)* above the revised June rate of 880,000 (+13.6% YoY). Multi-family completions: 332,000 units (+16.1% MoM; -8.7% YoY). 

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Total permits amounted to a SAAR of 1,336,000 units (1.270 million expected). This is 8.4% (±1.1%) above the revised June rate of 1,232,000 (originally 1.220 million units) and 1.5% (±1.4%) above the July 2018 SAAR of 1,316,000 units; the NSA comparison: +5.3% YoY.

Single-family permits were at a SAAR of 838,000; this is 1.8% (±1.4%) above the revised June figure of 823,000 (+1.4% YoY). Multi-family: 498,000 (+21.8% MoM; +13.7% YoY). 

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Builder confidence in the market for newly-built single-family homes rose one point to 66 in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Sentiment levels have held at a solid 64-to-66 level for the past four months.

“Even as builders report a firm demand for single-family homes, they continue to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of buildable lots,” said NAHB Chairman Greg Ugalde. 

“While 30-year mortgage rates have dropped from 4.1% down to 3.6% during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns,” said NAHB Chief Economist Robert Dietz. “Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes.”

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.