Builders
started construction of privately-owned housing units
in March at a seasonally adjusted annual rate (SAAR) of 1,793,000 units (1.750
million expected). This
is 0.3% (±12.3%)* above the revised February estimate of 1,788,000 (originally
1.769 million units) and 3.9% (±8.9%)* above the March 2021 SAAR of 1,725,000
units; the not-seasonally adjusted YoY change (shown in the table above) was +4.8%.
Single-family
housing starts in March were at a SAAR of 1,200,000; this is 1.7% (±12.3%)*
below the revised February figure of 1,221,000 units (-3.6% YoY). Multi-family:
593,000 units (+4.6% MoM; +27.8% 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 1,303,000 units. This is 4.5% (±11.3%)* below the
revised February estimate of 1,365,000 (originally 1.309 million units) and 13.0%
(±9.8%) below the March 2021 SAAR of 1,497,000 units; the NSA comparison: -11.3%
YoY.
Single-family completions were at a SAAR of 1,000,000; this is 6.4% (±10.7%)* below the revised February rate of 1,068,000 units (-1.3% YoY). Multi-family: 303,000 units (+2.0% MoM; -34.2% YoY).
Total
permits were at a SAAR of 1,873,000 units (1.830 million expected). This is 0.4%
above the revised February rate of 1,865,000 (originally 1.859 million units)
and 6.7% above the March 2021 SAAR of 1,755,000 units; the NSA comparison: +7.5%
YoY.
Single-family permits were at a SAAR of 1,147,000; this is 4.8% below the revised February figure of 1,205,000 units (-3.3% YoY). Multi-family: 726,000 units (+10.0% MoM; +33.1% YoY).
Rapidly
rising interest rates combined with ongoing home price increases and higher
construction costs continue to take a toll on builder confidence and housing
affordability. Builder confidence in the market for newly built single-family
homes moved two points lower to 77 in April, according to the National
Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
This is the fourth straight month that builder sentiment has declined.
“Despite
low existing inventory, builders report sales traffic and current sales
conditions have declined to their lowest points since last summer as a sharp
jump in mortgage rates and persistent supply chain disruptions continue to
unsettle the housing market,” said NAHB Chairman Jerry
Konter. “Policymakers must take proactive steps to fix supply chain issues
that will reduce the cost of development, stem the rise in home prices and
allow builders to increase production.”
“The
housing market faces an inflection point as an unexpectedly quick rise in
interest rates, rising home prices and escalating material costs have
significantly decreased housing affordability conditions, particularly in the
crucial entry-level market,” said NAHB Chief Economist Robert Dietz.
Mortgage
interest rates have jumped more than 1.9 percentage points since the start of
the year and currently stand at 5%, the highest level in more than a decade.
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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