Builders
started construction of privately-owned housing units
in January at a seasonally adjusted annual rate (SAAR) of 1,638,000 units (1.708
million expected). This is 4.1% (±13.7%)* below the revised December
estimate of 1,708,000 (originally 1.702 million units), but 0.8% (±12.5%)*
above the January 2021 SAAR of 1,625,000 units; the not-seasonally adjusted YoY
change (shown in the table above) was +2.1%.
Single-family
housing starts in January were at a SAAR of 1,116,000; this is 5.6% (±12.0%)*
below the revised December figure of 1,182,000 units (-1.7% YoY). Multi-family:
522,000 units (-0.8% MoM; +9.9% 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 1,246,000 units.
This is 5.2% (±8.0%)* below the revised December estimate of 1,315,000 (originally
1.295 million units) and 6.2% (±10.0%)* below the January 2021 SAAR of 1,328,000
units; the NSA comparison: -7.2% YoY.
Single-family completions were at a SAAR of 927,000; this is 7.3% (±6.8%) below the revised December rate of 1,000,000 units (-9.3% YoY). Multi-family: 319,000 units (+1.3% MoM; 0.0% YoY).
Total
permits were at a SAAR of 1,899,000 units (1.760 million expected). This is 0.7% above the revised December rate
of 1,885,000 (originally 1.873 million units) and 0.8% above the January 2021 SAAR
of 1,883,000 units; the NSA comparison: +2.9% YoY.
Single-family permits were at a SAAR of 1,205,000 units; this is 6.8% above the revised December figure of 1,128,000 units (-1.4% YoY). Multi-family: 694,000 units (-8.3% MoM; +10.9% YoY).
Despite
strong buyer demand, builder sentiment continued to slip in February as the
industry grapples with ongoing building material production bottlenecks that
are raising construction costs and delaying projects.
Builder
confidence in the market for newly built single-family homes moved one point
lower to 82 in February, marking the second straight month that confidence
levels have declined by a single point, according to the NAHB/Wells Fargo
Housing Market Index (HMI). Despite these monthly declines, the HMI has posted
very solid readings at or above the 80-point mark for the past five months.
“Production
disruptions are so severe that many builders are waiting months to receive
cabinets, garage doors, countertops and appliances,” said NAHB Chairman Jerry
Konter. “These delivery delays are raising construction costs and pricing
prospective buyers out of the market. Policymakers must make it a priority to
address supply chain issues that are harming housing affordability.”
“Residential
construction costs are up 21% on a year over year basis, and these higher
development costs have hit first-time buyers particularly hard,” said NAHB
Chief Economist Robert Dietz. “Higher interest rates in 2022 will further
reduce housing affordability even as demand remains solid due to a lack of
resale inventory.”
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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