Based on residential permit data compiled by the Home Builders Association of Southeastern Michigan (HBA) in Bingham Farms and reported in the HBA and Carter Lumber Southeastern Michigan Residential Building Activity Report, a total of 238 single-family home permits were issued in February 2022, short of the forecast.
“Frankly, I am surprised at February’s totals,” says Michael Stoskopf, CEO of the HBA. “All the economic indicators were such that a start similar to last year seemed to be reasonable. In winter months, weather can play a factor but since it was actually milder in February 2022 than 2021, that likely wasn’t the reason. In talking to builders, supply chain issues remain. This includes the most significant factor related to construction — lumber prices — which were over 28 percent higher in February 2022 than the previous year.”
February’s total was 21 percent lower than January 2022’s revised total of 300 permits and was 30 percent lower than the total for February 2021 (349). HBA’s econometric model had forecast a total of 353 permits for the month.
In stark contrast, multi-family construction added 301 permits in February, up 64 percent from the 184 reported in January 2022. Perhaps more significantly, this is the best start to the year for multi-family permits since February 1990 (1,457).
The employment figures used by the HBA to forecast permits showed positive signs. Compared to February 2021, employment is up 5.7 percent to 1,893,174. This is also a very slight gain (0.7 percent) over last month. The available workforce is up similarly to 1,997,076, 5.5 percent year-over-year and 1.6 percent month-over-month.
North American vehicle production and crude oil prices per barrel are not moving in a positive direction. Vehicle production is down 2.3 percent year-over-year and 3.3 percent month-over-month for a total of 1,089,595. One barrel of crude oil has risen to $86.90, which is a 27.4 percent increase month-over-month and 63.2 percent year-over-year.
The average single family home sale price and permit value are moving in a positive direction. The average home sale price rose to $266,457, up 1.2 percent month-over-month and 8.5 percent year-over-year. Average permit value increased to $375,697, up 5.7 percent month-over-month and 26 percent year-over-year.