October 2019 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in October at a seasonally adjusted annual rate (SAAR) of 1,314,000 units (1.320 million expected). This is 3.8% (±8.7%)* above the revised September estimate of 1,266,000 (originally 1.256 million units) and 8.5% (±10.8%)* above the October 2018 SAAR of 1,211,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +7.0%.

Single-family starts were at a SAAR of 936,000; this is 2.0% (±6.3%)* above the revised September figure of 918,000 (+6.0% YoY). Multi-family starts: 378,000 units (+8.6% MoM; +9.4% 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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Total completions were at a SAAR of 1,256,000 units. This is 10.3% (±11.7%)* above the revised September estimate of 1,139,000 (originally 1.262 million units) and 12.4% (±11.7%) above the October 2018 SAAR of 1,117,000 units; the NSA comparison: +11.8% YoY.

Single-family completions were at a SAAR of 897,000; this is 4.5% (±10.3%)* above the revised September rate of 858,000 (+7.8% YoY). Multi-family completions: 359,000 units (+27.8% MoM; +23.9% YoY). 

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Total permits amounted to a SAAR of 1,461,000 units (1.380 million expected). This is 5.0% (±1.7%) above the revised September rate of 1,391,000 (originally 1.425 million units) and 14.1% (±2.1%) above the October 2018 SAAR of 1,281,000 units; the NSA comparison: +15.7% YoY.

Single-family permits were at a SAAR of 909,000; this is 3.2% (±1.0%) above the revised September figure of 881,000 (+7.6% YoY). Multi-family: 552,000 (+8.2% MoM; +30.8% YoY). 

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Builder confidence in the market for newly-built single-family homes edged one point lower to 70 in November, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The past two months mark the highest sentiment levels in 2019.

“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” said NAHB Chairman Greg Ugalde. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.”

“We have seen substantial year-over-year improvement following the housing affordability crunch of late 2018, when the HMI stood at 60,” said NAHB Chief Economist Robert Dietz. “However, lot shortages remain a serious problem, particularly among custom builders. Builders also continue to grapple with other affordability headwinds, including a lack of labor and regulatory constraints.”

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.