Builders
started construction of privately-owned housing units in
April at a seasonally adjusted annual rate (SAAR) of 1,569,000 units (1.705
million expected).
This is 9.5% (±10.8%)* below the revised March estimate of 1,733,000
(originally 1.739 million units), but 67.3% (±21.6%) above the April 2020 SAAR
of 938,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was -66.0%.
Single-family
housing starts in April were at a rate of 1,087,000; this is 13.4% (±7.9%)
below the revised March figure of 1,255,000 units (+58.2% YoY). Multi-family: 482,000
units (+0.8% MoM; +88.5% 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 1,449,000 units.
This is 4.4% (±8.6percent)* below the revised March estimate of
1,515,000 (originally 1.580 million units), but 21.7% (±15.8%) above the April
2020 SAAR of 1,191,000 units; the NSA comparison: +22.0% YoY.
Single-family completions were at a SAAR of 1,045,000 units; this is 0.1% (±8.4%)* above the revised March rate of 1,044,000 units (+20.6% YoY). Multi-family: 404,000 units (-14.2% MoM; +25.7% YoY).
Total
permits amounted to a SAAR of 1,760,000 units (1.780 million expected). This is
0.3% (±1.2%)* above the revised March rate of 1,755,000 (originally 1.766
million units) and 60.9% (±1.8%) above the April 2020 SAAR of 1,094,000 units;
the NSA comparison: +63.2% YoY.
Single-family permits were at a SAAR of 1,149,000; this is 3.8% (±1.0%) below the revised March figure of 1,194,000 units (+69.2% YoY). Multi-family: 611,000 units (+8.9% MoM; +52.2% YoY).
Builder
confidence held stable in May despite growing concerns over the price and
availability of most building materials, including lumber. The May NAHB/Wells
Fargo Housing Market Index (HMI) showed that builder confidence in the market
for newly built single-family homes was 83, unchanged from April.
“Builder
confidence in the market remains strong due to a lack of resale inventory, low
mortgage interest rates, and a growing demographic of prospective home buyers,”
said NAHB Chairman Chuck
Fowke. “However, first-time and first-generation home buyers are
particularly at risk for losing a purchase due to cost hikes associated with
increasingly scarce material availability. Policymakers must take note and find
ways to increase production of domestic building materials, including lumber
and steel, and suspend tariffs on imports of construction materials.”
“Low
interest rates are supporting housing affordability in a market where the cost
of most materials is rising,” said NAHB Chief Economist Robert Dietz. “In
recent months, aggregate residential construction material costs were up 12%
year over year, and our surveys suggest those costs are rising further. Some
builders are slowing sales to manage their own supply chains, which means
growing affordability challenges for a market in critical need of more
inventory.”
With
labor and lot availability a challenge in many markets, Dietz cautioned that
“home buyers should expect rising prices throughout 2021 as the cost of
materials, land and labor continue to rise.”
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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