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Builders
started construction of privately-owned
housing units in
March at a seasonally adjusted annual rate (SAAR) of 1,216,000 units (1.320
million
expected).
This is 22.3% (±12.2%) below the revised February estimate of 1,564,000
(originally 1.599 million units), but 1.4% (±12.7%)* above the March 2019 SAAR
of 1,199,000 units; the not-seasonally adjusted YoY change (shown in the table
above) was +1.9%.
Single-family
housing starts in March were at a SAAR of 856,000; this is 17.5% (±13.1%) below
the revised February figure of 1,037,000 units (+2.9% YoY). Multi-family
starts: 360,000 units (-31.7% MoM; -0.4% 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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Total
completions were at a SAAR of 1,227,000 units. This is 6.1% (±12.0%)* below the
revised February estimate of 1,307,000 (originally 1.316 million units) and 9.0%
(±12.4%)* below the March 2019 SAAR of 1,348,000 units; the NSA comparison: -8.6%
YoY.
Single-family
housing completions were at a SAAR of 863,000; this is 15.0% (±11.6%) below the
revised February rate of 1,015,000 units (-9.6% YoY). Multi-family completions:
364,000 units (+24.7% MoM; -6.1% YoY).
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Total
permits amounted to a SAAR of 1,353,000 units (1.300 million expected). This is
6.8% (±1.1%) below the revised February rate of 1,452,000 (originally 1.464
million units), but 5.0% (±2.4%) above the March 2019 SAAR of 1,288,000 units;
the NSA comparison: +9.7% YoY.
Single-family
permits were at a SAAR of 884,000; this is 12.0% (±1.9%) below the revised
February figure of 1,005,000 units (+13.5% YoY). Multi-family: 469,000 (+4.9%
MoM; +2.7% YoY).
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Reflecting
the growing effects of the COVID-19 pandemic, builder confidence in the market
for newly-built single-family homes plunged 42 points in April to 30, according
to the latest NAHB/Wells Fargo
Housing
Market Index (HMI). The decline in April was the largest single monthly change
in the history of the index and marks the lowest builder confidence reading
since June 2012. It is also the first time that builder confidence has been in
negative territory (below 50) since June 2014.
“This
unprecedented drop in builder confidence is due exclusively to the coronavirus
outbreak across the nation, as unemployment has skyrocketed and gaps in the
supply chain have hampered construction activities,” said NAHB Chairman Dean
Mon. “Meanwhile, there continues to be some confusion over builder eligibility
for the Paycheck Protection Program, as some builders have successfully
submitted loan applications while others have not been able to. NAHB is working
with the White House, Treasury and Congress to get the broadest builder
participation possible. Home building remains an essential business throughout
most of the nation, and as the pandemic shows signs of easing in the weeks
ahead, buyers should return to the marketplace.”
“Before
the pandemic hit, the housing market was showing signs of strength with January
and February new home sales at their highest pace since the Great Recession,”
said NAHB Chief Economist Robert Dietz. “To show how hard and fast this
outbreak has hit the housing sector, a recent poll of our members reveals that
96% reported that virus mitigation efforts were hurting buyer traffic. While
the virus is severely disrupting residential construction and the overall
economy, the need and demand for housing remains acute. As social distancing
and other mitigation efforts show signs of easing this health crisis, we expect
that housing will play its traditional role of helping to lead the economy out
of a recession later in 2020.”
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.
