Builders
started construction of privately-owned housing units in
October at a seasonally adjusted annual rate (SAAR) of 1,530,000 units (1.460
million expected).
This is 4.9% (±11.1%)* above the revised September estimate of 1,459,000
(originally 1.415 million units) and 14.2% (±8.8%) above the October 2019 SAAR
of 1,340,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was +15.0%.
Single-family
housing starts in October were at a rate of 1,179,000; this is 6.4% (±8.7%)*
above the revised September figure of 1,108,000 units (+31.5% YoY).
Multi-family: 351,000 units (0.0% MoM; -18.4% YoY).
* 90% confidence interval (CI) is not statistically different from zero. The Census Bureau does not publish CIs for the entire multi-unit category.
Total
completions were at a SAAR of 1,343,000. This is 4.5% (±9.5%)* below the
revised September estimate of 1,406,000 (originally 1.413 million units), but 5.4%
(±10.7%)* above the October 2019 SAAR of 1,274,000 units; the NSA comparison:
+6.1% YoY.
Single-family
completions were at a SAAR of 883,000; this is 3.4% (±8.4%)* below the revised
September rate of 914,000 units (-3.7% YoY). Multi-family: 460,000 units (-6.5%
MoM; +33.6% YoY).
Total
permits amounted to a SAAR of 1,545,000 units (1.560 million expected). This is
virtually unchanged (±1.3%)* from the revised September rate of 1,545,000
(originally 1.553 million units), but 2.8% (±1.6%) above the October 2019 SAAR
of 1,503,000 units; the NSA comparison: -2.1% YoY.
Single-family permits were at a rate of 1,120,000; this is 0.6% (±1.0%)* above the revised September figure of 1,113,000 units (+16.4% YoY). Multi-family: 425,000 units (-1.6% MoM; -29.5% YoY).
In
another sign that housing continues to lead the economy forward, builder
confidence in the market for newly-built single-family homes increased five
points to 90 in November, shattering the previous all-time of 85 recorded in
October, according to the latest NAHB/Wells Fargo Housing Market Index (HMI).
Builder confidence levels have hit successive all-time highs over the past
three months.
“Historically
low mortgage rates, favorable demographics and an ongoing suburban shift for
home buyer preferences have spurred demand and increased new home sales by
nearly 17% in 2020 on a year-to-date basis,” said NAHB Chairman Chuck
Fowke. “Though builders continue to sign sales contracts at a solid pace,
lot and material availability is holding back some building activity. Looking
ahead to next year, regulatory policy risk will be a key concern given these
supply-side constraints.”
“Another
record high for the HMI reflects that housing is a bright spot for the
economy,” said NAHB Chief Economist Robert Dietz. “However, affordability
remains an ongoing concern, as construction costs continue to rise and interest
rates are expected to move higher as more positive news emerges on the
coronavirus vaccine front. In the short run, the shift of housing demand to
lower density markets such as suburbs and exurbs with ongoing low resale
inventory levels is supporting demand for home building.”
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.
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