Builders
started construction of privately-owned housing units
in August at a seasonally adjusted annual rate (SAAR) of 1,575,000 units (1.440
million expected). This is 12.2% (±14.9%)* above the revised
July estimate of 1,404,000 (originally 1.446 million units, but 0.1% (±9.6%)*
below the August 2021 SAAR of 1,576,000 units; the not-seasonally adjusted YoY
change (shown in the table above) was +0.4%..
Single-family
housing starts in August were at a SAAR of 935,000; this is 3.4% (±10.1%)*
above the revised July figure of 904,000 units (-15.2% YoY). Multi-family:
640,000 units (+28.0% MoM; +36.7% 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 1,342,000.
This is 5.4% (±12.1%)* below the revised July estimate of 1,419,000 (originally
1.424 million units), but 3.1% (±10.5%)* above the August 2021 SAAR of
1,302,000 units; the NSA comparison: +2.7% YoY.
Single-family completions were at a SAAR of 1,017,000; this is 0.4% (±12.8%)* above the revised July rate of 1,013,000 units (+7.1% YoY). Multi-family: 325,000 units (-20.0% MoM; -7.8% YoY).
Total
permits were at a SAAR of 1,517,000 units (1.621 million expected). This is 10.0% below the revised July rate of
1,685,000 (originally 1.674 million units) and 14.4% below the August 2021 SAAR
of 1,772,000 units; the NSA comparison: -13.0% YoY.
Single-family permits were at a SAAR of 899,000; this is 3.5% below the revised July figure of 932,000 units (-14.1% YoY). Multi-family: 618,000 units (-17.9% MoM; -11.3% YoY).
In
another sign that the slowdown in the housing market continues, builder
sentiment fell for the ninth straight month in September as the combination of
elevated interest rates, persistent building material supply chain disruptions
and high home prices continue to take a toll on affordability.
Builder
confidence in the market for newly built single-family homes fell three points
in September to 46, the lowest level since May 2014 with the exception of the
spring of 2020, according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
“Buyer
traffic is weak in many markets as more consumers remain on the sidelines due
to high mortgage rates and home prices that are putting a new home purchase out
of financial reach for many households,” said NAHB Chairman Jerry
Konter. “In another indicator of a weakening market, 24% of builders
reported reducing home prices, up from 19% last month.”
“Builder
sentiment has declined every month in 2022, and the housing recession shows no
signs of abating as builders continue to grapple with elevated construction
costs and an aggressive monetary policy from the Federal Reserve that helped
pushed mortgage rates above 6% last week, the highest level since 2008,” said
NAHB Chief Economist Robert Dietz. “In this soft market, more than half of the
builders in our survey reported using incentives to bolster sales, including
mortgage rate buydowns, free amenities and price reductions.”
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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