Builders
started construction of privately-owned housing units
in December at a seasonally adjusted annual rate (SAAR) of 1,702,000 units (1.650
million expected). This is 1.4% (±10.1%)* above the revised
November estimate of 1,678,000 (originally 1.679 million units) and 2.5% (±13.8%)*
above the December 2020 SAAR of 1,661,000 units; the not-seasonally adjusted
YoY change (shown in the table above) was +4.5%.
Single-family
housing starts were at a SAAR of 1,172,000; this is 2.3% (±9.8%)* below the
revised November figure of 1,199,000 units (-9.7% YoY). Multi-family: 530,000
units (+10.6% MoM; +54.7% YoY).
An
estimated 1,595,100 housing units were started in 2021. This is 15.6% (±4.0%)
above the 2020 figure of 1,379,600.
* 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 1,295,000 units.
This is 8.7% (±14.5%)* below the revised November estimate of 1,418,000 (originally
1.282 million units) and 6.6% (±10.4%)* below the December 2020 SAAR of
1,386,000 units; the NSA comparison: -5.7% YoY.
Single-family
completions were at a SAAR of 990,000; this is 3.9% (±13.3%)* above the revised
November rate of 953,000 units (+4.2% YoY). Multi-family: 305,000 units (-34.4%
MoM; -29.6% YoY).
An estimated 1,337,800 housing units were completed in 2021. This is 4.0% (±3.2%)* above the 2020 figure of 1,286,900.
Total
permits were at a SAAR of 1,873,000 units (1.710 million expected). This is 9.1% (±1.1%) above the revised
November rate of 1,717,000 (originally 1.712 million units) and 6.5% (±1.7%)
above the December 2020 SAAR of 1,758,000 units; the NSA comparison: +10.9% YoY. Much of the outsized increase in permits
comes from a 111.9% (+/- 3.8%) jump in permits issued in Philadelphia, PA. Philadelphia enacted several real estate tax
changes for residential projects permitted after December 31, 2021.
Single-family
authorizations were at a SAAR of 1,128,000; this is 2.0% (±1.3%) above the
revised November figure of 1,106,000 units (-8.2% YoY). Multi-family: 745,000
units (+21.9% MoM; +46.1% YoY).
An estimated 1,724,700 housing units were authorized by building permits in 2021. This is 17.2% (±0.6%) above the 2020 figure of 1,471,100; the NSA comparison was 1.710 million units (+16.2% YoY).
Growing
inflation concerns and ongoing supply chain disruptions snapped a four-month
rise in home builder sentiment even as consumer demand remains robust. Builder
confidence in the market for newly built single-family homes moved one point
lower to 83 in January, according to the NAHB/Wells Fargo Housing Market Index
(HMI). The HMI has hovered at the 83 or 84 level, the same rate as the spring
of 2021, for the past three months.
“Higher
material costs and lack of availability are adding weeks to typical
single-family construction times,” said NAHB Chairman Chuck
Fowke. “NAHB analysis indicates the aggregate cost of residential
construction materials has increased almost 19% since December 2020.
Policymakers need to take action to fix supply chains. Obtaining a new softwood
lumber agreement with Canada and reducing tariffs is an excellent place to
start.”
“The
HMI data was collected during the first two weeks of January and do not fully
reflect the recent jump in mortgage interest rates,” said NAHB Chief Economist
Robert Dietz. “While lean existing home inventory and solid buyer demand are
supporting the need for new construction, the combination of ongoing increases
for building materials, worsening skilled labor shortages and higher mortgage
rates point to declines for housing affordability in 2022.”
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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