Based on new 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 303 single-family home permits were issued in Macomb, Oakland, St. Clair, and Wayne counties in April.
The permit activity was 31 percent lower than April 2021’s total of 436 permits. The slowdown comes from several factors, including rising interest rates, inflation, supply chain delays, and declining consumer confidence.
The HBA’s econometric model had forecast a total of 472 permits for the month. April’s total also fell 27 percent below March 2022’s revised total of 414 permits.
Multi-family permits fell as well, adding a total of 29 permits in April, a far cry from the 12-month average of 207 permits per month.
“The biggest apparent factor contributing to the slowdown is the significant rise in the baseline 30-year fixed rate mortgage,” says Forrest M. Wall, CEO of the HBA.
The industry metrics the HBA considers in forecasting again showed a mixed bag. The number of employed people and the available workforce are both on the rise year-over-year, up 6.3 percent and 6.5 percent, respectively. The monthly changes in these metrics were both below a single percent.
Despite the drop in permits across the board, the average home sale price is up 4.5 percent month-over-month and 6.2 percent year-over-year at a price of $296,033. The average value of a new single-family permit is up significantly year-over-year, rising 16.9 percent to $374,162, which is a 1.7 percent gain on the month.
Purely positive metrics stop there. As reported monthly by Freddie Mac, the 30-year rate, plus points, rose to 5.78 percent, representing an increase of 2.2 basis points over April 2021. This is the highest point the measure has hit since April 2010, which had reached 5.8 percent.
The price of crude oil per barrel is up 21 percent month-over-month and 81.6 percent year-over-year to $111.76. North American vehicle production numbers were mixed, declining a sharp 13.7 percent month-over-month to approximately 1.2 million vehicles. While the short-term decline is notable, the number represents a year-over-year gain of 14.9 percent.