Builders
started construction of privately-owned housing units
in June at a seasonally adjusted annual rate (SAAR) of 1,559,000 units (1.588
million expected).
This is 2.0% (±9.0%)* below the revised May estimate of 1,591,000 (originally
1.549 million units) and 6.3% (±10.2%)* below the June 2021 SAAR of 1,664,000
units; the not-seasonally adjusted YoY change (shown in the table above) was -7.5%.
Single-family
housing starts in June were at a SAAR of 982,000; this is 8.1% (±12.2%)* below
the revised May figure of 1,068,000 units (-16.3% YoY). Multi-family: 577,000
units (+10.3% MoM; +15.7% 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 1,365,000 units.
This is 4.6% (±11.7%)* below the revised May estimate of 1,431,000 (originally
1.465 million units), but 4.6% (±13.4%)* above the June 2021 SAAR of 1,305,000
units; the NSA comparison: +2.9% YoY.
Single-family housing completions were at a SAAR of 996,000; this is 4.1% (±11.1%)* below the revised May rate of 1,039,000 units (+6.4% YoY). Multi-family: 369,000 units (-5.9% MoM; -5.1% YoY).
Total
permits were at a SAAR of 1,685,000 units (1.666 million expected). This is 0.6% below the revised May rate of
1,695,000 (originally 1.695 million units) but 1.4% above the June 2021 SAAR of
1,661,000 units; the NSA comparison: -0.6% YoY.
Single-family permits were at a SAAR of 967,000 units; this is 8.0% below the revised May figure of 1,051,000 units (-13.9% YoY). Multi-family: 718,000 units (+11.5% MoM; +26.9% YoY).
Builder
confidence plunged in July as high inflation and increased interest rates
stalled the housing market by dramatically slowing sales and buyer traffic. In
a further sign of a weakening housing market, builder confidence in the market
for newly built single-family homes posted its seventh straight monthly decline
in July, falling 12 points to 55, according to the National Association of Home
Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This marks the lowest
HMI reading since May 2020 and the largest single-month drop in the history of
the HMI, except for the 42-point drop in April 2020.
“Production
bottlenecks, rising home building costs and high inflation are causing many
builders to halt construction because the cost of land, construction and
financing exceeds the market value of the home,” said NAHB Chairman Jerry
Konter. “In another sign of a softening market, 13% of builders in the HMI
survey reported reducing home prices in the past month to bolster sales and/or
limit cancellations.”
"Affordability
is the greatest challenge facing the housing market,” said NAHB Chief Economist
Robert Dietz. “Significant segments of the home buying population are priced
out of the market. Policymakers must address supply-side issues to help
builders produce more affordable housing.”
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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