Housing permits reflect rising builder confidence

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Today, the U.S. Census Bureau reported that housing starts came in as a miss of estimates at 1.52 million for October and housing permits came in at a beat at 1.65 million. Revisions came in negative, but the real story here is that housing is back to its slow construction phase, which isn’t shocking considering where monthly supply is at and the delays in construction that we are all aware of.

Demand is good enough to keep buildings going as the monthly supply of new homes is still below 6.5 months on a three-month average. We can see that in housing permits.

Census: Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,650,000.  his is 4.0 percent (±1.5 percent) above the revised September rate of 1,586,000 and is 3.4 percent (±1.6 percent) above the October 2020 rate of 1,595,000. Single‐family authorizations in October were at a rate of 1,069,000; this is 2.7 percent (±1.2 percent) above the revised September figure of 1,041,000.  Authorizations of units in buildings with five units or more were at a rate of 528,000 in October

Housing completion is the only thing that is slower than my tortoise, Grundy. We are all aware of the delays that we are dealing with as a country due to shortages. However, it isn’t the entire story.

Census: Privately‐owned housing completions in October were at a seasonally adjusted annual rate of 1,242,000.  This is virtually unchanged from (±13.0 percent)* the revised September estimate of 1,242,000, but is 8.4 percent (±9.2 percent)* below the October 2020 rate of 1,356,000.  Single‐family housing completions in October were at a rate of 929,000; this is 1.7 percent (±12.7 percent)* below the revised September rate of 945,000. The October rate for units in buildings with five units or more was 302,000.

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