Residential Building Sector In June 2014: Continues To Soften

Residential building permits in June was mixed – a glass half full. The market was expecting better news. Our analysis is that this sector continues to slow.

 

• The rate of annual growth for building permits in the last 12 months has declined from a channel between 25% and 40% to less than 10%. This month was a 6.7%expansion year-over-year.
• 3 month rolling averages for permits (comparing the current averages to the averages one year ago) again declined this month.

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

Unadjusted 3 Month Rolling Average of Year-over-Year Growth – Building Permit (blue line) and Construction Completions (red line)

 

Econintersect Analysis:

• Building permits growth accelerated 11.8% month-over-month, and is up 6.7% year-over-year. Last month’s data was terrible accounting for the acceleration but the rolling average trend line (graph above blue line) tells the real story.
• Single family building permits expanded 5.9% year-over-year.
• Construction completions decelerated 20.7% month-over-month, up 4.9% year-over-year.

US Census Headlines:

• building permits down 4.2% month-over-month, up 2.7% year-over-year
• construction completions down 12.0% month-over-month, up 3.4% year-over-year.
• the market expected:

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