June 19, 2018

May 2018 Housing Starts and Permits: Raw Numbers Show Strength and Continued Improvement

Filed under: Economy,Taxes & Government — Tom @ 9:52 am

From the Census Bureau:

Building Permits
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,301,000. This is 4.6 percent (±1.4 percent) below the revised April rate of 1,364,000, but is 8.0 percent (±1.3 percent) above the May 2017 rate of 1,205,000. Single-family authorizations in May were at a rate of 844,000; this is 2.2 percent (±1.0 percent) below the revised April figure of 863,000. Authorizations of units in buildings with five units or more were at a rate of 421,000 in May.

Housing Starts
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent (±10.2 percent)* above the revised April estimate of 1,286,000 and is 20.3 percent (±14.4 percent) above the May 2017 rate of 1,122,000. Single-family housing starts in May were at a rate of 936,000; this is 3.9 percent (±10.6 percent)* above the revised April figure of 901,000. The May rate for units in buildings with five units or more was 404,000.

Housing Completions
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 1,291,000. This is 1.9 percent (±13.7 percent)* above the revised April estimate of 1,267,000 and is 10.4 percent (±12.1 percent)* above the May 2017 rate of 1,169,000. Single-family housing completions in May were at a rate of 890,000; this is 11.0 percent (±12.7 percent)* above the revised April rate of 802,000. The May rate for units in buildings with five units or more was 389,000.

There’s some hyperventilating over the drop in seasonally adjusted permits which appears to be completely unjustified:

HousingStartSAandNSA0115to0518

No one can look at the raw numbers and fail to see anything other than pretty decent improvement. By contrast, the raw numbers for starts are similarly positive but nowhere near as strong as the 20.3 percent reported year-over-year seasonally adjusted increase.

This (for the umpteenth time) is why complete analysis requires a look at the raw numbers.

The bigger, long-term picture is that starts and permits are still some distance from but nonetheless heading towards the pre-housing bubble levels of the late-1990s.

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