Following a volatile January, residential construction rebounded in February, according to the latest report from the U.S. Census Bureau, released Thursday.
The numbers:
Building permits
Privately‐owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,859,000. This is 1.9% below the revised January rate of 1,895,000 but is 7.7% above the February 2021 rate of 1,726,000.
Single‐family authorizations in February were at a rate of 1,207,000; this is 0.5% below the revised January figure of 1,213,000. Authorizations of units in buildings with five units or more were at a rate of 597,000 in February.
Housing starts
Privately‐owned housing starts in February were at a seasonally adjusted annual rate of 1,769,000. This is 6.8% (±14.9%) above the revised January estimate of 1,657,000 and is 22.3% (±14.3%) above the February 2021 rate of 1,447,000.
Single‐family housing starts in February were at a rate of 1,215,000; this is 5.7% (±11.8%) above the revised January figure of 1,150,000. The February rate for units in buildings with five units or more was 501,000.
Housing completions
Privately‐owned housing completions in February were at a seasonally adjusted annual rate of 1,309,000. This is 5.9% (±13.3%) above the revised January estimate of 1,236,000 but is 2.8% (±12.0%) below the February 2021 rate of 1,347,000.
Single‐family housing completions in February were at a rate of 1,034,000; this is 12.1% (±14.7%) above the revised January rate of 922,000. The February rate for units in buildings with five units or more was 266,000.
The takeaway:
“New residential construction is feeling the pressures of inflation, labor shortages and rising interest rates,” commented George Ratiu, senior economist and manager of Economic Research at realtor.com. “The trends are also reflected in stumbling homebuilder sentiment, with the NAHB Market Index down for three consecutive months, on sliding buyer traffic and affordability concerns. In addition, with Russia’s war in Ukraine disrupting supply chains, and higher import duties on Canadian softwood, lumber prices shot up to over $1,300 per thousand board feet in February, not far from the May 2021 record high. The cost of new homes continues to increase, with builders passing higher expenses to consumers, who are seeing prices jump by thousands of dollars from week-to-week.”
