Builders
started construction of privately-owned housing units in March
at a seasonally adjusted annual rate (SAAR) of 1,420,000 units (1.400 million expected).
This is 0.8% (±13.0%)* below the revised February estimate of 1,432,000
(originally 1.450 million units) and 17.2% (±9.1%) below the March 2022 SAAR of
1,716,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was -17.0%.
Single-family
housing starts in March were at a SAAR of 861,000; this is 2.7% (±14.4%)* above
the revised February figure of 838,000 units (-26.8% YoY). Multi-family: 559,000
units (-5.9% MoM; +6.1% 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 1,542,000 units. This is 0.6% (±13.3%)* below the
revised February estimate of 1,552,000 (originally 1.557 million units), but 12.9%
(±18.6%)* above the March 2022 SAAR of 1,366,000 units; the NSA comparison: +13.3%
YoY.
Single-family completions were at a SAAR of 1,050,000; this is 2.4% (±12.4%)* above the revised February rate of 1,025,000 units (+0.5% YoY). Multi-family: 492,000 units (-6.6% MoM; +58.9% YoY).
Total
permits were at a SAAR of 1,413,000 units (1.441 million expected). This is 8.8%
below the revised February rate of 1,550,000 (originally 1.524 million units)
and 24.8% below the March 2022 SAAR of 1,879,000 units; the NSA comparison: -23.2%
YoY.
Single-family authorizations were at a SAAR of 818,000; this is 4.1% above the revised February figure of 786,000 units (-26.3% YoY). Multi-family: 595,000 units (-22.1% MoM; -17.9% YoY).
Press
release from NAHB’s Robert Dietz:
“Builders
remained cautiously optimistic in April as limited resale inventory helped to
increase demand in the new home market even as the industry continues to
grapple with building material issues.
“Builder
confidence in the market for newly built single-family homes in April rose one
point to 45, according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
“Currently,
one-third of housing inventory is new construction, compared to historical
norms of a little more than 10%. More buyers looking at new homes, along with
the use of sales incentives, have supported new home sales since the start of
2023.
“While
AD&C loan conditions are tight, there is not significant evidence thus far
that pressure on the regional bank system has made this lending environment for
builders and land developers worse. Builders note that additional declines in
mortgage rates, to below 6%, will price-in further demand for housing.
Nonetheless, the industry continues to be plagued by building material issues,
including lack of access to electrical transformer equipment.
“The
HMI survey shows that the share of builders reducing home prices continues
trending down, as 30% said they reduced prices in April, compared to 31% in
March and February, 35% in December and 36% in November. The average price reduction
in April was 6%, the same as in February and March but lower than in December
(8%). The share of builders using incentives to bolster sales has edged up from
57% in February, to 58% in March to now 59% in April, but it’s still lower than
it was last December (62%).”
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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