November 2018 Residential Permits, Starts and Completions

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Builders started construction of privately-owned housing units in November at a seasonally adjusted annual rate (SAAR) of 1,256,000 units (1.222 million expected). This is 3.2% (±9.8%)* above the revised October estimate of 1,217,000 (originally 1.228 million units), but 3.6% (±9.4%)* below the November 2017 SAAR of 1,303,000 units; the not-seasonally adjusted YoY change (shown in the table above) was -2.0%.

Single-family housing starts in November were at a rate of 824,000; this is 4.6% (±8.4%)* below the revised October figure of 864,000 (-12.7% YoY). Multi-family starts: 432,000 units (+22.4% MoM; +23.6% YoY).

* 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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Completions in November were at a SAAR of 1,099,000. This is 0.4% (±8.7%)* above the revised October estimate of 1,095,000, but 3.9% (±11.5%)* below the November 2017 SAAR of 1,144,000 units; the NSA comparison: -3.5% YoY.

Single-family housing completions were at a SAAR of 772,000; this is 5.4% (±7.6%)* below the revised October rate of 816,000 (-1.8% YoY). Multi-family completions: 327,000 units (+17.2% MoM; -7.8% YoY). 

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Total permits were at a SAAR of 1,328,000 units (1.258 million expected). This is 5.0% (±1.6%) above the revised October rate of 1,265,000 (originally 1.263 million units) and 0.4% (±1.7%)* above the November 2017 SAAR of 1,323,000 units; the NSA comparison: +2.9% YoY.

Single-family permits were at a SAAR of 848,000; this is 0.1% (±1.4%)* above the revised October figure of 847,000 (-1.8% YoY). Multi-family: 480,000 (+14.8% MoM; +10.9% YoY). 

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Builder confidence in the market for newly-built single-family homes fell four points to 56 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) as concerns over housing affordability persist. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory.

“We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel. “However, recent declines in mortgage interest rates should help move the market forward in early 2019.”

“The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market,” said NAHB Chief Economist Robert Dietz. “This housing slowdown is an early indicator of economic softening, and it is important that builders manage supply-side costs to keep home prices competitive for buyers at different price points.”

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.