The spring housing surge appears to be happening, at least in terms of permits and starts.
Tuesday's housing starts and permits report is one of the very strongest on record and with starts soaring 20.2% in April to a much higher-than-expected annual rate of 1.135 million and with permits up 10.1% to a much higher-than-expected 1.143 million.
The gain for starts is the best in 7-1/2 years with the gain in permits the best in 7 years.
“Inventory has been an anchor in the sand holding back housing for quite some time,” said Quicken Loans Vice President Bill Banfield. “While these reports are sometimes prone to revisions, a significant uptick in new home construction could help many buyers looking for a home in the coming months, from the trade-up buyer to those looking to purchase their first home.”
Oddly, this comes a day after homebuilder confidence took a stumble.
Builder confidence in the market for newly built, single-family homes in May dropped two points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index released today.
It, however, is a nine-point increase from the May 2014 reading of 45.
“Despite this month’s slight dip, builder confidence in the new home market remains above the 50-point benchmark,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “Overall, the second quarter of 2015 is shaping up to be very solid.”
Strength in starts is split between single-family, up 16.7% to 0.733 million, and multi-family, up 27.2% to 0.402 million. Single-family starts are up a very convincing 14.7% year-on-year with permits up only 0.5%.
Strength in permits is centered in multi-family units, up 20.5% to a 0.477 million rate and underscoring the importance of renters in the housing sector.
Permits for single-family homes rose a less spectacular but still very solid 3.7% to 0.666 million. Year-on-year, single-family permits still lead at plus 7.1% vs plus 5.5% for multi-family permits.
Regional data show special strength for starts and permits in the Northeast followed by the West. Readings on the Midwest and South, though a bit mix, are also strong.