Builders
started construction of privately-owned housing units in
July at a seasonally adjusted annual rate (SAAR) of 1,534,000 units (1.61
million expected). This is 7.0 percent (±8.9 percent)* below the
revised June estimate of 1,650,000 (originally 1.643 million units), but 2.5
percent (±10.9 percent)* above the July 2020 SAAR of 1,497,000 units; the not-seasonally
adjusted YoY change (shown in the table above) was +1.7%.
Single-family
housing starts in July were at a SAAR of 1,111,000; this is 4.5 percent (±9.9
percent)* below the revised June figure of 1,163,000 units (+11.0% YoY).
Multi-family: 423,000 units (-13.1% MoM; -17.9% 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 1,391,000 units. This is 5.6 percent (±16.4
percent)* above the revised June estimate of 1,317,000 (originally 1.324
million units) and 3.8 percent (±14.4 percent)* above the July 2020 SAAR of
1,340,000 units; the NSA comparison: +3.8% YoY.
Single-family housing completions were at a SAAR of 954,000 units; this is 3.6 percent (±16.1 percent)* above the revised June rate of 921,000 units (-0.5% YoY). Multi-family: 437,000 units (+10.4% MoM; +12.8% YoY).
Total
permits were at a SAAR of 1,635,000 units (1.62 million expected). This is 2.6
percent (±0.9 percent) above the revised June rate of 1,594,000 (originally 1.598
million units) and 6.0 percent (±0.9 percent) above the July 2020 SAAR of
1,542,000 units; the NSA comparison: +0.5% YoY.
Single-family permits were at a SAAR of 1,048,000; this is 1.7 percent (±0.8 percent) below the revised June figure of 1,066,000 (-0.6% YoY). Multi-family: 587,000 units (+11.2% MoM; +2.8% YoY).
Higher
construction costs and supply shortages along with rising home prices pushed
builder confidence to its lowest reading since July 2020, according to the
NAHB/Wells Fargo Housing Market Index (HMI). Builder sentiment in the market
for newly built single-family homes fell five points to 75 in August.
“Buyer
traffic has fallen to its lowest reading since July 2020 as some prospective
buyers are experiencing sticker shock due to higher construction costs,” said
NAHB Chairman Chuck
Fowke. “Policymakers need to find long-term solutions to supply-chain
issues.”
“While
the demographics and interest for home buying remain solid, higher costs and
material access issues have resulted in lower levels of home building and even
put a hold on some new home sales,” said NAHB Chief Economist Robert Dietz.
“While these supply-side limitations are holding back the market, our
expectation is that production bottlenecks should ease over the coming months
and the market should return to more normal conditions.”
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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