Builders
started construction of privately-owned housing units
in February at a seasonally adjusted annual rate (SAAR) of 1,769,000 units
(1.700 million expected). This is 6.8% (±14.9%)* above the revised
January estimate of 1,657,000 (originally 1.638 million units) and 22.3% (±14.3%)
above the February 2021 SAAR of 1,447,000 units; the not-seasonally adjusted
YoY change (shown in the table above) was +22.0%.
Single-family
housing starts in February were at a SAAR of 1,215,000; this is 5.7% (±11.8%)*
above the revised January figure of 1,150,000 units (+12.1% YoY). Multi-family:
554,000 units (+9.3% MoM; +49.1% 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 1,309,000 units.
This is 5.9% (±13.3%)* above the revised January estimate of 1,236,000 (originally
1.246 million units), but 2.8% (±12.0%)* below the February 2021 SAAR of
1,347,000 units; the NSA comparison: -0.8% YoY.
Single-family completions were at a SAAR of 1,034,000; this is 12.1% (±14.7%)* above the revised January rate of 922,000 units (+4.6% YoY). Multi-family: 275,000 units (-12.4% MoM; -18.6% YoY).
Total
permits were at a SAAR of 1,859,000 units (1.850 million expected). This is 1.9% below the revised January rate
of 1,895,000 (originally 1.899 million units) but 7.7% above the February 2021 SAAR
of 1,726,000 units; the NSA comparison: +9.1% YoY.
Single-family permits were at a SAAR of 1,207,000; this is 0.5% below the revised January figure of 1,213,000 units (+7.5% YoY). Multi-family: 652,000 units (-4.4% MoM; +12.3% YoY).
Ongoing
lumber and building material supply side constraints, rising construction costs
and expectations of higher interest rates continue to negatively affect builder
sentiment even as buyer demand remains relatively solid.
Builder
confidence in the market for newly built single-family homes moved two points
lower to 79 in March from a downwardly revised reading in February, according
to the NAHB/Wells Fargo Housing Market Index (HMI). This is the third straight
month that builder sentiment has declined and the first time the HMI has dipped
below the 80-point mark since last September.
“While
builders continue to report solid buyer traffic numbers, helped by historically
low existing home inventory and a persistent housing deficit, increasing
development and construction costs have taken a toll on builder confidence,”
said NAHB Chairman Jerry
Konter. “We call upon policymakers to act now to ease supply-chain woes.
Improving access to lumber, OSB and other materials will help builders increase
the supply of badly needed housing and fight inflation.”
“The
March HMI recorded the lowest future sales expectations in the survey since
June 2020,” said NAHB Chief Economist Robert Dietz. “Builders are reporting
growing concerns that increasing construction costs (up 20% over the last 12
months) and expected higher interest rates connected to tightening monetary
policy will price prospective home buyers out of the market. While low existing
inventory and favorable demographics are supporting demand, the impact of
elevated inflation and expected higher interest rates suggests caution for the
second half of 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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