With the Census Bureau, like the rest of the government, shut down and unable to release its usual economic data the National Association of Home Builders (NAHB) is attempting to fill the gap with a little bit of its own construction data. It included estimates of single and multifamily housing starts in its usual monthly report on builder confidence.
The Association estimates that housing starts in September were around 900,000 on a seasonally adjusted annual basis. This number includes an estimate of single family starts between 620,000 and 630,000 units. In addition they estimate that multifamily starts were at a seasonally adjusted rate of 255,000 to 270,000.
"The NAHB estimate of 875,000 to
900,000 total housing starts is based on continuing improvement in
single-family starts and ongoing volatility in multifamily construction," NAHB
Chief Economist David Crowe. "Single-family
starts dipped in July but rebounded in August, and we expect continued strength
in September," Crowe added. "The Fed meeting in mid-September provided
additional relief to builders and buyers that interest rates would remain near
historic lows for the immediate future, encouraging consumers back into the
"Meanwhile, multifamily starts have been unusually volatile since the beginning of the year, swinging between 250,000 and 400,000 units from month-to-month. We expect some bounce back from the August pace of 263,000 as multifamily starts continue to trend around 300,000 units."
All four of its measures of builder confidence fell in October NAHB said today, with each declining by two points, bring NAHB's Housing Market Index (HMI), produced jointly with First American Title Company down to 55.
The HMI and its three component indexes are constructed from the results of a monthly survey NAHB conducts among its builder members. Each is asked to gauge the current market and where they think the market will be in six months on a scale of "good," "fair," or "poor," and to grade their perception of current buyer traffic as "high to very high," "average" or "low to very low." A score over 50 for the index or any of its three components indicate that more builders view market conditions as good as view them as poor. The component measuring current sales conditions registered 58, while the one gauging sales expectations in the next six months posted a reading of 62 and the current traffic component registered 44.
"Builder optimism remains above 50
and we are still seeing signs of pent-up demand in many markets across the
country," said NAHB Chairman Rick Judson. "This slight dip in builder sentiment
is the result of continuing challenges in the marketplace with regard to the
cost and availability of labor and lots and uncertainty in Washington"
"A spike in mortgage interest rates along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation's debt limit have caused builders and consumers to take pause," Crowe said. "However, interest rates remain near historic lows and we don't expect the level of rates to have a major impact on sales and starts going forward. Once this government impasse is resolved, we expect builder and consumer optimism will bounce back."
The regions are now scored along three-month moving averages. The South held steady at 56, the West declined a single point to 60 and the Northeast fell three points to 38. The Midwest posted a one-point gain to 64.