Builders
started construction of privately-owned housing units
in April at a seasonally adjusted annual rate (SAAR) of 1,724,000 units (1.765
million expected). This is 0.2% (±8.7%)* below the revised March
estimate of 1,728,000 (originally 1.793 million units), but 14.6% (±14.2%)
above the April 2021 SAAR of 1,505,000 units; the not-seasonally adjusted YoY
change (shown in the table above) was +14.1%..
Single-family
housing starts in April were at a rate of 1,100,000 units (+3.8% YoY).
Multi-family: 624,000 units (+15.3% MoM; +40.2% 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 1,295,000 units.
This is 5.1% (±11.5%)* below the revised March estimate of 1,365,000 (originally
1.303 million units) and 8.6% (±7.5%) below the April 2021 SAAR of 1,417,000
units; the NSA comparison: -8.0% YoY.
Single-family housing completions were at a SAAR of 1,001,000; this is 4.9% (±14.1%)* below the revised March rate of 1,053,000 units (+1.4% YoY). Multi-family: 294,000 units (-5.8% MoM; -30.1% YoY).
Total
permits were at a SAAR of 1,819,000 units (1.815 million expected). This is 3.2% below the revised March rate of
1,879,000 (originally 1.873 million units) but 3.1% above the April 2021 SAAR
of 1,765,000 units; the NSA comparison: -2.7% YoY.
Single-family permits were at a SAAR of 1,110,000 units (-9.3% YoY). Multi-family: 709,000 units (-1.0% MoM; +11.1% YoY).
In
a sign that the housing market is now slowing, builder confidence took a steep
drop in May as growing affordability challenges in the form of rapidly rising
interest rates, double-digit price increases for material costs and ongoing
home price appreciation are taking a toll on buyer demand. Builder confidence
in the market for newly built single-family homes fell eight points to 69 in
May, according to the National Association of Home Builders (NAHB)/Wells Fargo
Housing Market Index (HMI). This is the fifth straight month that builder
sentiment has declined and the lowest reading since June 2020.
“Housing
leads the business cycle and housing is slowing,” said NAHB Chairman Jerry
Konter. “The White House is finally getting the message and yesterday
released an action plan to address rising housing costs that emphasizes a very
important element long-advocated by NAHB -- the need to build more homes to
ease the nation’s housing affordability crisis.”
“The
housing market is facing growing challenges,” said NAHB Chief Economist Robert
Dietz. “Building material costs are up 19% from a year ago, in less than three
months mortgage rates have surged to a 12-year high and based on current
affordability conditions, less than 50% of new and existing home sales are
affordable for a typical family. Entry-level and first-time home buyers are
especially bearing the brunt of this rapid rise in mortgage rates.”
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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