Let’s dive into the New Residential Construction report for April for a look at the US housing market.
Building Permits
- Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,819,000. This is 3.2 percent below the revised March rate of 1,879,000, but is 3.1 percent above the April 2021 rate of 1,765,000.
- Single‐ family authorizations in April were at a rate of 1,110,000; this is 4.6 percent below the revised March figure of 1,163,000.
- Authorizations of units in buildings with five units or more were at a rate of 656,000 in April.
Housing Starts
- Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,724,000. This is 0.2 percent below the revised March estimate of 1,728,000, but is 14.6 percent above the April 2021 rate of 1,505,000.
- Single‐family housing starts in April were at a rate of 1,100,000; this is 7.3 percent below the revised March figure of 1,187,000.
- The April rate for units in buildings with five units or more was 612,000.
Housing Completions
- Privately‐owned housing completions in April were at a seasonally adjusted annual rate of 1,295,000. This is 5.1 percent below the revised March estimate of 1,365,000 and is 8.6 percent below the April 2021 rate of 1,417,000.
- Single‐family housing completions in April were at a rate of 1,001,000; this is 4.9 percent below the revised March rate of 1,053,000.
- The April rate for units in buildings with five units or more was 281,000.
Revisions
- Unadjusted estimates of housing units authorized by building permits for January through December 2021 have been revised.
- Seasonally adjusted estimates of housing units authorized by building permits have been revised back to January 2016
- Seasonally adjusted estimates of housing units authorized but not started, started, under construction, and completed have been revised back to January 2017.
My charts in this post show the revisions.
Housing Starts, Permits, Completions, Since 2000
The completion bottleneck is enormous.
Builders are struggling getting materials and workers. Some delayed hoping material prices would fall.
Key Takeaways
A 0.2 percent decline in starts is not meaningful. The negative revisions and the 7.3 percent decline in single-family units is what matters.
The Fed is likely pleased with these numbers. Multi-family units will help with rental prices as will lagging completions.
Still, the decline does not even register on my lead chart. But with mortgage rates now well over 5 percent, the slowdown will accelerate from here.
Rapidly Rising Mortgage Rates Finally Impact the Price of Lumber, Durable Goods Are Next
On May 16 I commented Rapidly Rising Mortgage Rates Finally Impact the Price of Lumber, Durable Goods Are Next
Lumber has peaked this cycle as mortgage rates soar over five percent. A recession looms despite yesterday’s blowout retail sales numbers.
I will have further thoughts on retail sales later today.
This post originated at MishTalk.Com.
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Mortgage applications decreased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 13, 2022.
The Market Composite Index, a measure of mortgage loan application volume, decreased 11.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 11 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 15 percent lower than the same week one year ago.