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Construction Numbers Highest Since 2007, Crushing Expectations

by devteam May 19th, 2015 | Share

Residential construction numbers soared in April after arndismal March and both the number of residential permits issued and housingrnstarts easily outpaced the expectations of analysts surveyed earlier by Reuters.  The numbers were especially strong in thernNortheast region as its unusually harsh winter ended.  The construction data was provided in a jointrnrelease from the U.S. Census Bureau and the U.S. Department of Housing andrnUrban Development </p

Permits for residential construction were issued at arnseasonally adjusted annual rate of 1,143,000 units, an increase of 10.1 percentrnfrom the slightly downgraded (from 1,039,000 units) March estimate of 1,038,000rnunits.  Analysts had forecast permits atrn1.06 million units.  The current estimaternis an increase of 6.4 percent from the 1,074,000 units permitted in April 2014.</p

There were 666,000 permits issued for single family constructionrnduring the month, up 3.7 percent from March’s 642,000 permits.  Construction was authorized for 444,000 unitsrnin buildings with five or more units compared to 370,000 units in March, anrnincrease of 20.0 percent.</p

On a non-seasonally adjusted basis there were a total ofrn105,000 permits issued during the month compared to 91,300 in March.  Permits for single family construction rosernfrom an estimated 57,500 in March to 64,000.</p

Housing starts nationally jumped by 20.2 percent from arnmonth earlier to a seasonally adjusted annual rate of 1,135,000.  Analysts had expected a rate of 1.02rnmillion.  The March estimate of housingrnstarts was revised from 926,000 to 944,000. rnOn an annual basis starts were 9.2 percent higher than a year earlierrnwhen the estimate was 1,039,000 units.</p

Single-family construction was begun on an estimated 733,000rnunits, an increase of 16.7 percent from the revised (from 618,000) Marchrnestimate of 628,000.  Construction wasrnbegun on 389,000 units in multi-unit buildings, up from 295,000 in March. </p

The month-over-month improvement in starts was even morernapparent after looking at non-seasonally adjusted numbers.  April starts were estimated at 103,600rncompared to 78.800 in March.  Singlernfamily starts numbered 69,200, up from 53,200</p

Housing units were completed at a seasonally adjusted annualrnrate of 986,000, a 20.4 percent jump from the previous month’s estimate of 819,000rn(revised down from 823,000), and 19.4 percent more completions than in Aprilrn2014 when 826,000 units were completed.</p

Single family completions in April were at the rate ofrn688,000 units, a 14.5 percent increase from March and up 15.2 percent from arnyear earlier.  There were an estimatedrn288,000 multi-family units completed.  </p

On a non-seasonally adjusted basis completions nationwide werernestimated at 76,100, 53,600 of which were single family units.</p

At the end of the reporting period there were an estimatedrn853,000 housing units under construction nationwide, 363,000 of them single-familyrnhomes.  There were 134,000 permitsrnoutstanding for which construction had not yet begun, including 62,000 single-familyrnpermits.</p

The surge in numbers in the Northeast covered all phases ofrnconstruction. Permitting rose 38.8 percent over March and 57.0 percent comparedrnto a year earlier.  Starts were up byrn85.9 percent compared to March and 52.1 percent on an annual basis andrncompletions increased by 73.3 percent and 42.5 percent respectively.</p

In the Midwest permits declined by 1.3 percent compared tornMarch and 7.5 percent from a year earlier. rnHousing starts however rose 27.8 percent month-over-month but remained 10.5rnpercent lower than in April 2014. rnCompletions were up 82.5 percent for the month and were 51.6 percentrnhigher than a year earlier.</p

The South posted a 9.9 percent increase in permits fromrnMarch and 1.3 percent from April 2014. Starts were down 1.8 percent for thernmonth but 3.5 percent above those the prior year. Completions were up 2.2 percentrnfrom March and 7.4 percent year-over-year.</p

Permits were up 3.0 percent in the West compared to Marchrnand 3.4 percent higher than the previous April. rnStarts jumped by 39.0 percent and 14.9 percent for the two earlierrnperiods.  Completions were 13.9 percentrnhigher than in March and 16.8 percent above the April 2014 level.

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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