Builders
started construction of privately-owned housing units in
February at a seasonally adjusted annual rate (SAAR) of 1,421,000 units (1.579
million expected).
This is 10.3% (±10.5%)* below the revised January estimate of 1,584,000
(originally 1.580 million units) and 9.3% (±9.4%)* below the February 2020 SAAR
of 1,567,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was -9.8%.
Single-family
housing starts in February were at a SAAR of 1,040,000; this is 8.5% (±9.3%)*
below the revised January figure of 1,136,000 units (-1.1% YoY). Multi-family: 381,000
units (-15.0% MoM; -26.2% 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 1,362,000. This is 2.9% (±10.0%)* above the
revised January estimate of 1,324,000 (originally 1.336 million units) and 5.0%
(±11.9%)* above the February 2020 SAAR of 1,297,000 units; the NSA comparison:
+5.3% YoY.
Single-family completions were at a SAAR of 1,042,000; this is 2.8% (±10.5%)* above the revised January rate of 1,014,000 units (+4.7% YoY). Multi-family: 320,000 units (+3.2% MoM; +7.5% YoY).
Total
permits amounted to a SAAR of 1,682,000 units (1.725 million expected). This is
10.8% (±1.0%) below the revised January rate of 1,886,000 (originally 1.881
million units), but 17.0% (±1.4%) above the February 2020 SAAR of 1,438,000
units; the NSA comparison: +17.0% YoY.
Single-family permits were at a rate of 1,143,000; this is 10.0% (±0.8%) below the revised January figure of 1,270,000 units (+14.3% YoY). Multi-family: 539,000 units (-12.5% MoM; +23.5% YoY).
Despite
high buyer traffic and strong demand, builder sentiment fell in March as rising
lumber and other material prices pushed builder confidence lower. The latest
NAHB/Wells Fargo Housing Market Index (HMI) showed that builder confidence in
the market for newly built single-family homes fell two points to 82 in March.
“Though
builders continue to see strong buyer traffic, recent increases for material
costs and delivery times, particularly for softwood lumber, have depressed
builder sentiment this month,” said NAHB Chairman Chuck
Fowke. “Supply shortages and high demand have caused lumber prices to jump
more than 200% since last April. Policymakers must address building material
supply chain issues to help the economy sustain solid growth in 2021.”
“Builder
confidence peaked at a level of 90 last November and has trended lower as
supply-side and demand-side factors have trimmed housing affordability,” said
NAHB Chief Economist Robert Dietz. “While single-family home building should
grow this year, the elevated price of lumber is adding approximately $24,000 to
the price of a new home. And mortgage interest rates, while historically low,
have increased about 30 basis points over the last month. Nonetheless, the lack
of resale inventory means new construction is the only option for some
prospective home buyers.”
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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