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, 393 single-family home permits were issued in March 2022.
“Springtime is always an exciting time as new residential construction begins accelerating coming out of the winter months,” says Forrest Wall, CEO of the HBA. “March clearly didn’t disappoint with totals falling just short of 400 permits for the month.
“That the totals were significantly below March 2021 simply demonstrates two primary factors: ongoing supply chain issues and the impact of quickly rising interest rates. Both factors affect overall new home affordability, typically resulting in fewer permits being issued.”
Despite the totals being down 29 percent year-over-year, the total was up 36 percent month-over-month from February 2022’s revised total of 289 permits. The total also fell slightly short of the HBA’s econometric model forecast of 422 permits.
Multifamily (for rent) construction added another 137 permits in March, bringing the year-to-date total to 622. This is the second-best start to the year for multi-family permits since March 1998.
The industry metrics the HBA considers in forecasting showed a mixed bag. The number of employed people int southeastern Michigan reached its highest level since March 2020, up 7.3 percent to 1,894,617 year-over-year, and remaining nearly unchanged month-over-month. The available workforce is also showing positive year-over-year trends, up 8.6 percent to 2,004,447, and nearly unchanged from February.
The crude oil price per barrel went up significantly year-over-year, jumping 50.2 percent to $92.35. Month-over-month this is 6.3 percent higher. Despite these prices, North American vehicle production has significantly increased month-over-month, jumping 29.9 percent to 1,415,326 vehicles. This is up 6.8 percent year-over-year.
The average single family home sale price is up to $283,280, a 6.3 percent increase month-over-month and a 7.8 percent increase year-over-year. The average value of a new single-family permit is down 3.2 percent month-over-month to $356,051, which is still a 12.1 percent year-over-year increase.