Builders
started construction of privately-owned housing units in
December at a seasonally adjusted annual rate (SAAR) of 1,460,000 units (1.425
million expected).
This is 4.3% (±12.5%)* below the revised November estimate of 1,525,000
(originally 1.560 million units), but 7.6% (±17.6%)* above the December 2022 SAAR
of 1,357,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was +6.9%.
Single-family
starts in December were at a rate of 1,027,000; this is 8.6% (±11.2%)* below
the revised November figure of 1,124,000 units (+14.4% YoY). Multi-family: 433,000
units (+8.0% MoM; -6.8% YoY).
An estimated 1,413,100 housing units were started in 2023. This is 9.0% (±2.5%) below the 2022 figure of 1,552,600.
* 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 1,574,000. This is 8.7% (±19.9%)* above the
revised November estimate of 1,448,000 (originally 1.447 million units) and 13.2%
(±17.7%)* above the December 2022 SAAR of 1,390,000 units; the NSA comparison: +15.0%
YoY.
Single-family
completions were at a SAAR of 1,056,000; this is 8.4% (±18.5%)* above the
revised November rate of 974,000 units (+8.3% YoY). Multi-family: 518,000 units
(+9.3% MoM; +33.5% YoY).
An
estimated 1,452,500 housing units were completed in 2023. This is 4.5% (±3.8%)
above the 2022 figure of 1,390,500.
Total
permits were at a SAAR of 1,495,000 units (1.478 million expected). This is 1.9%
above the revised November rate of 1,467,000 (originally 1.460 million units)
and 6.1% above the December 2022 SAAR of 1,409,000 units; the NSA comparison: -2.2%
YoY.
Single-family
authorizations in December were at a rate of 994,000; this is 1.7% above the
revised November figure of 977,000 units (+26.9% YoY). Multi-family: 501,000
units (+2.2% MoM; -28.3% YoY).
An estimated 1,469,800 housing units were authorized by building permits in 2023. This is 11.7% below the 2022 figure of 1,665,100.
Press
release from NAHB’s Robert Dietz:
“Mortgage
rates well under 7% over the past month have led to a sharp increase in builder
confidence to begin the new year.
“Builder
confidence in the market for newly built single-family homes climbed seven
points to 44 in January, according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI). This second consecutive monthly
increase in builder confidence closely tracks with a period of falling interest
rates.
“Mortgage
rates have decreased by more than 110 basis points since late October per
Freddie Mac, lifting the future sales expectation component in the HMI into
positive territory for the first time since August. Lower interest has improved
housing affordability and brought some buyers back into the market. However, as
home building expands in 2024, the market will see growing supply-side
challenges in the form of higher prices and/or shortages of lumber, lots and
labor.
“Even
as mortgage rates have fallen below 7% over the past month, many builders
continue to reduce home prices to boost sales. In January, 31% of builders
reported cutting home prices, down from 36% during the previous two months and
the lowest rate since last August. The average price reduction in January
remained at 6%, unchanged from the previous month. Meanwhile, 62% of builders
provided sales incentives of all forms in January. This share has remained
stable between 60% and 62% since October.”
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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