February 2020 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in February at a seasonally adjusted annual rate (SAAR) of 1,599,000 units (1.520 million expected). This is 1.5 percent (±12.4 percent)* below the revised January estimate of 1,624,000 (originally 1.567 million units), but 39.2 percent (±17.7 percent) above the February 2019 SAAR of 1,149,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +41.3%.

Single-family housing starts in February were at a rate of 1,072,000; this is 6.7 percent (±13.9 percent)* above the revised January figure of 1,005,000 units (+37.4% YoY). Multi-family starts: 527,000 units (-14.9% MoM; +49.6% 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 1,316,000 units. This is 0.2 percent (±12.4 percent)* below the revised January estimate of 1,319,000 (originally 1.280 million units) and 1.2 percent (±14.8 percent)* below the February 2019 SAAR of 1,332,000 units; the NSA comparison: -0.2% YoY.

Single-family completions were at a SAAR of 1,027,000; this is 14.1 percent (±14.1 percent)* above the revised January rate of 900,000 units (+24.8% YoY). Multi-family completions: 269,000 units (-31.0% MoM; -42.0% YoY). 

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Total permits amounted to a SAAR of 1,464,000 units (1.500 million expected). This is 5.5 percent (±1.5 percent) below the revised January rate of 1,550,000 (originally 1.551 million units), but 13.8 percent (±2.1 percent) above the February 2019 SAAR of 1,287,000 units; the NSA comparison: +12.4% YoY.

Single-family permits were at a SAAR of 1,004,000; this is 1.7 percent (±1.4 percent) above the revised January figure of 987,000 units (+23.0% YoY). Multi-family: 460,000 (-18.3% MoM; -6.5% YoY). 

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Builder confidence in the market for newly-built single-family homes fell two points to 72 in March, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). Sentiment levels have held in a firm range in the low- to mid-70s for the past six months.

“Builder confidence remains solid, although sales expectations for the next six months dropped four points on economic uncertainty stemming from the coronavirus,” said NAHB Chairman Dean Mon. “Interest rates remain low, and a lack of inventory creates market opportunities for single-family builders.”

“It is important to note that half of the builder responses in the March HMI were collected prior to March 4, so the recent stock market declines and the rising economic impact of the coronavirus will be reflected more in next month’s report,” said NAHB Chief Economist Robert Dietz.  “Overall, 21% of builders in the survey report some disruption in supply due to virus concerns in other countries such as China. However, the incidence is higher (33%) among builders who responded to the survey after March 6, indicating that this is an emerging issue.”

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.