2019 Residential Building Sector Best Growth Year Since 2007

The December 2019 headline residential building permits slowed and completions improved relative to last month - and the rolling averages showed a similar result. Best growth year since 2007.

Analyst Opinion of Residential Building

The backward revisions this month were slight. It is always difficult to understand the trends as the backward revisions sometimes reverse trends month-to-month. The nature of this industry normally has large variations from month-to-month (mostly due to weather) so the rolling averages are the best way to view this series.

In summary, the rolling averages say this sector is in another growth spurt - however this month the permits rate of growth again slowed but the rate of growth remained in double digits.

We consider this report similar to last month.

Over time, there is little difference between using permits or starts when one compares to completions.

Looking at residential construction employment, the year-over-year growth of employment has a reasonable correlation with housing starts.

 

 

Econintersect Analysis:

  • Unadjusted Construction completions are higher than permits.
  • Unadjusted 3-month rolling averages (comparing the current averages to the averages one year ago) is +13.0 % (permits) and +14.5 % (construction completions):

3 month Rolling Average for Year-over-Year Growth Unadjusted Data

  Building Permits Construction Completions
Current Movement decelerating

accelerating

 

 

 

  • Unadjusted Building permit growth accelerated 6.0% month-over-month and is up 12.5 % year-over-year.
  • Unadjusted Single-family building permits are up 16.9 % year-over-year.
  • Unadjusted Construction completions accelerated 10.1 % month-over-month,up 19.8 % year-over-year.

US Census Headlines:

  • building permits down 3.9 % month-over-month, up 5.8 % year-over-year
  • housing starts up 16.9 % month-over-month, up 40.8 % year-over-year
  • construction completions up 5.1 % month-over-month, up 19.6 % year-over-year.
  • the market expected (from Econoday):
Annual Rates Consensus Range Consensus Actual
Housing Starts 1.300 M to 1.400 M 1.373 M 1.608 M
Housing Permits 1.320 M to 1.475 M 1.458 M 1.416 M

Note that Econintersect analysis herein is based on UNADJUSTED data - not the headline seasonally adjusted data.

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