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Wednesday, June 17, 2015

May 2015 Residential Permits, Starts and Completions

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Total housing starts settled in May, to a seasonally adjusted and annualized rate (SAAR) of 1.036 million units (1.090 million expected). That level was 129,000 units lower (-11.1%) than April’s 1.165 million units. The decrease in total starts was split as follows -- single-family: -39,000 units (5.4%); multi-family: -90,000 units (20.2%). 
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Total starts were 4.6% above their year-earlier level (single-family: +6.7%; multi-family: +0.6%). Not-seasonally adjusted year-to-date (YTD) comparisons to 2014 were pared back in all components relative to May’s results. We would observe, also, that the annual (i.e., year-over-year) percentage change in total starts has not yet broken off its downward trend present since 2013. 
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Completions rose by 46,000 units (+4.7%) in May, to 1.034 million units SAAR. The increase was limited to the multi-family component (+81,000 or 25.5%); single-family dropped 35,000 units (-5.2%). As was the case with starts, YTD completions are positive relative to 2014. 
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Total permits jumped higher in May, by 135,000 units (+11.8%), to 1.275 million SAAR (1.105 million expected). The multi-family component dominated in May: +118,000 units (24.9%); single-family: +17,000 units (2.6%). YTD total permits were 8.8% above the same months in 2014, driven by the multi-family component (+14.4%).
The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) rose by five points in June (to 59). An index value above 50 means more builders feel the market is good than feel it is poor. “Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods. 
“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe. “At the same time, builders remain sensitive to consumers’ ability to buy a new home.” 
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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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