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Total
housing starts declined
in August to a seasonally adjusted and annualized rate (SAAR) of 1.126 million
units (1.168 million expected)
-- comparable to activity previously seen in November 2007. August’s level was 35,000
units below (-3.0% ±11.3%*) July’s 1.160 million units (revised from 1.206
million). The decrease in total starts was split as follows -- single-family: -23,000
units (-3.0% ±9.5%*); multi-family: -12,000 units (-3.0%).
* 90% confidence interval (CI) is not
statistically different from zero. The Census Bureau does not publish CIs for
the entire multi-unit category.
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Total
starts were 15.9% above their not-seasonally adjusted year-earlier level (single-family:
+15.3%; multi-family: +17.0%). Year-to-date (YTD) comparisons to 2014 were all
in the +11% range.
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Completions
fell by 61,000 units (-6.1% ±12.5%*) in August, to 935,000 units SAAR. The decrease
was limited to the multi-family component (-71,000 units or 19.7%);
single-family completions rose by 10,000 units (1.6% ±11.0%*).
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Total
permits partially recouped in August ground lost in July in the wake of a New
York City apartment construction tax
incentive that expired in mid-June. August permits rose by 40,000 units (+3.5%
±1.4%) to 1.170 million SAAR (1.160 million expected). The absolute increase
was about evenly split between the components -- single-family: +19,000 units (+2.8%
±1.7%); multi-family: +21,000 units (+4.7%). YTD total permits were 12.2% above
the same months in 2014, driven by the multi-family component (+21.1%).
The
latest National Association of Home Builders/Wells Fargo Housing Market Index
(HMI) ticked up to 62 (+1 point) in September -- the highest level since October
2005. (An HMI value above 50 means more builders feel the market is good than
feel it is poor.) “The HMI shows that single-family housing is making solid
progress,” said NAHB Chairman Tom Woods. “However, our members continue to tell
us that they are concerned about the availability of lots and labor.”
“NAHB
is projecting about 1.1 million total housing starts this year,” said Chief
Economist David Crowe. “Today's report is consistent with our forecast, and
barring any unexpected jolts, we expect housing to keep moving forward at a
steady, modest rate through the end of the year.”
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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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