What is Macro Pulse?

Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
Macro Pulse's timely yet in-depth coverage.


Wednesday, August 18, 2021

July 2021 Residential Permits, Starts and Completions

Click image for larger view

Click image for larger view

Builders started construction of privately-owned housing units in July at a seasonally adjusted annual rate (SAAR) of 1,534,000 units (1.61 million expected).  This is 7.0 percent (±8.9 percent)* below the revised June estimate of 1,650,000 (originally 1.643 million units), but 2.5 percent (±10.9 percent)* above the July 2020 SAAR of 1,497,000 units; the not-seasonally adjusted YoY change (shown in the table above) was +1.7%.

Single-family housing starts in July were at a SAAR of 1,111,000; this is 4.5 percent (±9.9 percent)* below the revised June figure of 1,163,000 units (+11.0% YoY). Multi-family: 423,000 units (-13.1% MoM; -17.9% YoY).

* 90% confidence interval (CI) is not statistically different from zero. The Census Bureau does not publish CIs for the entire multi-unit category.

Click image for larger view

Click image for larger view

Total completions were at a SAAR of 1,391,000 units. This is 5.6 percent (±16.4 percent)* above the revised June estimate of 1,317,000 (originally 1.324 million units) and 3.8 percent (±14.4 percent)* above the July 2020 SAAR of 1,340,000 units; the NSA comparison: +3.8% YoY.

Single-family housing completions were at a SAAR of 954,000 units; this is 3.6 percent (±16.1 percent)* above the revised June rate of 921,000 units (-0.5% YoY). Multi-family: 437,000 units (+10.4% MoM; +12.8% YoY).

Click image for larger view

Click image for larger view

Total permits were at a SAAR of 1,635,000 units (1.62 million expected). This is 2.6 percent (±0.9 percent) above the revised June rate of 1,594,000 (originally 1.598 million units) and 6.0 percent (±0.9 percent) above the July 2020 SAAR of 1,542,000 units; the NSA comparison: +0.5% YoY. 

Single-family permits were at a SAAR of 1,048,000; this is 1.7 percent (±0.8 percent) below the revised June figure of 1,066,000 (-0.6% YoY). Multi-family: 587,000 units (+11.2% MoM; +2.8% YoY).

Click image for larger view

Click image for larger view

Higher construction costs and supply shortages along with rising home prices pushed builder confidence to its lowest reading since July 2020, according to the NAHB/Wells Fargo Housing Market Index (HMI). Builder sentiment in the market for newly built single-family homes fell five points to 75 in August.

“Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” said NAHB Chairman Chuck Fowke. “Policymakers need to find long-term solutions to supply-chain issues.”

“While the demographics and interest for home buying remain solid, higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” said NAHB Chief Economist Robert Dietz. “While these supply-side limitations are holding back the market, our expectation is that production bottlenecks should ease over the coming months and the market should return to more normal conditions.”

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.