Builders
started construction of privately-owned housing units in
January at a seasonally adjusted annual rate (SAAR) of 1,580,000 units (1.650
million expected).
This is 6.0% (±16.4%)* below the revised December estimate of 1,680,000
(originally 1.669 million units) and 2.3% (±13.9%)* below the January 2020 SAAR
of 1,617,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was -3.2%.
Single-family
housing starts in January were at a SAAR of 1,162,000; this is 12.2% (±11.3%)
below the revised December figure of 1,323,000 units (+15.6% YoY).
Multi-family: 418,000 units (+17.1% MoM; -30.9% 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 1,336,000. This is 2.3% (±6.6%)* below the
revised December estimate of 1,368,000 (originally 1.417 million units), but 2.4%
(±11.0%)* above the January 2020 SAAR of 1,305,000 units; the NSA comparison:
+4.0% YoY.
Single-family housing completions were at a SAAR of 1,036,000; this is 10.0% (±8.5%) above the revised December rate of 942,000 units (+17.4% YoY). Multi-family: 300,000 units (-29.6% MoM; -26.4% YoY).
Total
permits amounted to a SAAR of 1,881,000 units (1.670 million expected). This is
10.4% (±1.2%) above the revised December rate of 1,704,000 (originally 1.709
million units) and 22.5% (±1.8%) above the January 2020 SAAR of 1,536,000
units; the NSA comparison: +13.7% YoY.
Single-family permits were at a SAAR of 1,269,000; this is 3.8% (±0.9%) above the revised December figure of 1,223,000 units (+19.2% YoY). Multi-family: 612,000 units (+27.2% MoM; +4.7% YoY).
Strong
buyer demand helped offset supply chain challenges and a surge in lumber prices
as builder confidence in the market for newly built single-family homes inched
up one point to 84 in February, according to the latest NAHB/Wells Fargo
Housing Market Index (HMI).
“Lumber
prices have been steadily rising this year and hit a record high in
mid-February, adding thousands of dollars to the cost of a new home and causing
some builders to abruptly halt projects at a time when inventories are already
at all-time lows,” said NAHB Chairman Chuck
Fowke. “Builders remain very focused on regulatory and other policy issues
that could price out households seeking new homes in a tight market this year.”
“Demand
conditions remain solid due to demographics, low mortgage rates and the
suburban shift to lower cost markets, but we expect to see some cooling in
growth rates for residential construction in 2021 due to cost factors, supply
chain issues and regulatory risks,” said NAHB Chief Economist Robert Dietz.
“Some builders are at capacity and may not be able to expand production due to
these headwinds.”
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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