August 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in August at a seasonally adjusted annual rate (SAAR) of 1,364,000 units (1.250 million expected). This is 12.3% (±10.2%) above the revised July estimate of 1,215,000 (originally 1.191 million units) and 6.6% (±11.6%)* above the August 2018 SAAR of 1,279,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +6.4%.

Single-family housing starts were at a rate of 919,000; this is 4.4% (±10.3%)* above the revised July figure of 880,000 (+2.1% YoY). Multi-family starts: 445,000 units (+32.8% MoM; +17.0% 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 were at a SAAR of 1,294,000 units. This is 2.4% (±11.5%)* above the revised July estimate of 1,264,000 (originally 1.250 million units) and 5.0% (±11.2%)* above the August 2018 SAAR of 1,232,000 units; the NSA comparison: +5.9% YoY.

Single-family completions were at a rate of 945,000; this is 3.7% (±10.5%)* above the revised July rate of 911,000 (+1.4% YoY). Multi-family completions: 349,000 units (-1.1% MoM; +18.2% YoY). 

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Total permits amounted to a SAAR of 1,419,000 units (1.300 million expected). This is 7.7% (±1.2%) above the revised July rate of 1,317,000 (originally 1.336 million units) and 12.0% (±1.6%) above the August 2018 SAAR of 1,267,000 units; the NSA comparison: +7.4% YoY.

Single-family permits were at a SAAR of 866,000; this is 4.5% (±0.8%) above the revised July figure of 829,000 (-0.6% YoY). Multi-family: 553,000 (+13.3% MoM; +23.5% YoY). 

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Builder confidence in the market for newly-built single-family homes rose one point to 68 in September from an upwardly revised August reading of 67, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Sentiment levels have held in the mid- to upper 60s since May and September’s reading matches the highest level since last October.

“Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor,” said NAHB Chairman Greg Ugalde.

“Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” said NAHB Chief Economist Robert Dietz. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China. NAHB’s Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.”

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.