Based on residential permit data compiled by the Home Builders Association of Southeastern Michigan (HBA) and reported in the HBA and Carter Lumber Southeastern Michigan Residential Building Activity Report, a total of 430 single-family home permits were issued in Macomb, Oakland, St. Clair, and Wayne counties in May 2021.
This figure is 10 percent higher than the revised total for April 2021 (391), but one percent lower than May 2019 (434), which is being used due to skewed data from the pandemic.
“The results for May are mixed. While permits were lower than what our econometric model forecast (453) to be issued in May, the actual numbers are on par with pre-COVID numbers and in line with relative historical results when comparing May to April,” says Michael Stoskopf, HBA’s CEO “May’s result also marks the twelfth consecutive month with permits at or above the 300-permit threshold. Given the ongoing supply chain challenges since COVID shutdown, the new home building industry is still strong here in southeastern Michigan.”
Although softwood lumber has seen the largest increase in price compared to pre-COVID levels, the residential construction supply chain is seeing prices rise across the board. Raw materials such as copper and cement, construction products such as drywall, carpeting, fixtures, and appliances.
The HBA forecasts a plateau in activity for the next six months, with a lower number of employed people, lower North American vehicle production, and higher crude oil prices as driving factors for the 10 to 15 percent lower projections than normal.
The price for a barrel of crude oil according to NYMEX is $62.44, a 523 percent increase from this time one year ago. The average value of a new single-family permit according to the HBA is $308,379, which is up three percent from last year, but down nearly nine percent from last month.
North American vehicle production has stayed steady from last month and is up 210 percent from last June. A bump greater than about two percent was expected, however, which tampers the permit forecast.
The number of both employed people and total workforce saw small drops from May to June, both under two percent. The number of employed people has seen a 32 percent jump from last June during the pandemic.