Builders
started construction of privately-owned housing units
in December at a seasonally adjusted annual rate (SAAR) of 1,382,000 units (1.362
million expected). This
is 1.4% (±16.9%)* below the revised November estimate of 1,401,000 (originally
1.427 million units) and 21.8% (±11.2%) below the December 2021 SAAR of
1,768,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was -21.6%. An estimated 1,553,300
housing units were started in 2022; this is 3.0% (±2.4%) below the 2021 figure
of 1,601,000 units.
Single-family
housing starts in December were at a rate of 909,000; this is 11.3% (±20.7%)*
above the revised November figure of 817,000 units (-24.3% YoY). Multi-family:
473,000 units (-19.0% MoM; -15.9% 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 1,411,000. This is 8.4% (±16.5%)* below the
revised November estimate of 1,540,000 (originally 1.490 million units), but is
6.4% (±11.4%)* above the December 2021 SAAR of 1,326,000 units; the NSA
comparison: +5.4% YoY. An estimated 1,392,300 housing units were completed in
2022, 3.8% (±3.3%) above the 2021 figure of 1,341,000 units.
Single-family housing completions in December were at a SAAR of 1,005,000; this is 8.0% (±11.6%)* below the revised November estimate of 1,092,000 units (-2.0% YoY). Multi-family: 406,000 units (-9.4% MoM; +31.7% YoY).
Total
permits were at a SAAR of 1,330,000 units (1.380 million expected). This is 1.6%
below the revised November estimate of 1,351,000 (originally 1.342 million
units) and 29.9% below the December 2021 SAAR of 1,896,000 units; the NSA
comparison: -33.2% YoY. The Census Bureau estimates 1,649,400 housing units
were authorized by building permits in 2022, 5.0% below the 2021 figure of
1,737,000; using not-seasonally adjusted data, we estimate 1.626 million units
permitted during 2022, down 6.4%.
Single-family permits were at a SAAR of 730,000; this is 6.5% below the revised November figure of 781,000 units (-39.0% YoY). Multi-family: 600,000 units (+5.3% MoM; -26.8% YoY).
A
modest drop in interest rates helped to end a string of 12 straight monthly
declines in builder confidence levels, although sentiment remains in bearish
territory as builders continue to grapple with elevated construction costs,
building material supply chain disruptions and challenging affordability
conditions.
Builder
confidence in the market for newly built single-family homes in January rose
four points to 35, according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
“It
is possible that the low point for builder sentiment in this cycle was
registered in December, even as many builders continue to use a variety of
incentives, including price reductions, to bolster sales,” wrote NAHB’s Robert Dietz. “The rise in builder sentiment also means that cycle lows for permits
and starts are likely near, and a rebound for home building could be underway
later in 2023.
“While
NAHB is forecasting a decline for single-family starts this year compared to
2022, it appears a turning point for housing lies ahead. In the coming
quarters, single-family home building will rise off of cycle lows as mortgage
rates are expected to trend lower and boost housing affordability. Improved
housing affordability will increase housing demand, as the nation grapples with
a structural housing deficit of 1.5 million units.”
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.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.