Jump in Building Permits Hints at Uptick in New Home Sales
The U.S. Census Bureau and the Department of Housing and Urban Development have released New Residential Construction statistics for March 2011.
Housing Starts data estimates how much new residential real estate construction
occurred in the previous month. New construction means digging has begun.
Adding rooms or renovating old ones does not count, the builder must be
constructing a new home (can be on old foundation if re-building). Although the
report offers up single family housing, 2-4 unit housing, and 5-unit and above
housing data, single family housing is by far the most important as it accounts
for 70-80% of total home building (which should be shifting more toward
multi-family in the years ahead).
Building Permits data provides an estimate on the number of homes planning on
being built. This indicator basically tracks how much future construction
activity we should expect to take place in the future. This data is a part of
Conference Board's Index of Leading Economic Indicators.
Here is quick recap from Reuters....
RTRS- US MARCH HOUSING STARTS +7.2 PCT VS FEB -18.5 PCT (PREV -22.5 PCT)
RTRS- US MARCH HOUSING STARTS 549,000 UNIT RATE (CONSENSUS 520,000) VS FEB 512,000 (PREV 479,000)
RTRS- US MARCH HOUSING PERMITS +11.2 PCT VS FEB -5.2 PCT
RTRS- US MARCH HOUSING PERMITS 594,000 UNIT RATE (CONSENSUS 540,000) VS FEB 534,000
RTRS- US MARCH SINGLE-FAMILY STARTS +7.7 PCT TO 422,000 UNIT RATE; MULTIFAMILY +5.8 PCT TO 127,000 UNIT RATE
RTRS- US MARCH HOUSING PERMITS 5 UNITS OR MORE AT 173,000, HIGHEST SINCE JAN 2009
Excerpts from the Release...
BUILDING PERMITS
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 594,000. This is 11.2 percent (±2.6%) above the revised February rate of 534,000, but is 13.3 percent (±1.3%) below the March 2010 estimate of 685,000.
Single-family authorizations in March were at a rate of 405,000; this is 5.7 percent (±1.1%) above the revised February figure of 383,000. Authorizations of units in buildings with five units or more were at a rate of 173,000 in March.
HOUSING STARTS
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 549,000. This is 7.2 percent (±18.0%)* above the revised February estimate of 512,000, but is 13.4 percent (±9.1%) below the March 2010 rate of 634,000.
Single-family housing starts in March were at a rate of 422,000; this is 7.7 percent (±15.0%)* above the revised February figure of 392,000. The March rate for units in buildings with five units or more was 117,000.
HOUSING COMPLETIONS
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 509,000. This is 14.2 percent (±13.9%) below the revised February estimate of 593,000 and is 20.8 percent (±9.6%) below the March 2010 rate of 643,000.
Single-family housing completions in March were at a rate of 374,000; this is 22.2 percent (±9.4%) below the revised February rate of 481,000. The March rate for units in buildings with five units or more was 130,000.
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We are able make a forward looking observation about New Home Sales to come because the New Home Sales survey is primarily based on a sample of houses selected from Building Permits data. Building Permits were up 11.2% in March, so New Home Sales should make some positive progress in March as well....from a record low of course. READ MORE