A total of 302 single family home permits were issued in Macomb, Oakland, St. Clair, and Wayne counties in February 2021, according to the Home Builders Association of Southeastern Michigan in Bingham Farms.
The number of total permits is on par with February 2020’s 306 issued permits, and up from January 2021’s revised total of 295 permits issued.
At the same time, sales of existing homes in the four counties were at 3,412 units, according to data from REALCOMP — it was the region’s best showing since February 2017 when 3,344 homes were sold. This, along with the lack of existing home inventory (down 52 percent compared to last year) serves to drive much of the new home permit activity in the region.
The average new single family permit value was $308,450, a 5.6 percent drop from January 2021 and a 19 percent increase from February 2020. The average single family home sale price was $245,658, a 1.3 percent increase from January and a 15 percent increase year over year.
“While we are excited about permit performance so far in 2021, as we noted last month, there are economic headwinds that are continuing to be of concern,” says Michael Stoskopf, CEO of the association. “The foremost factor is construction material pricing escalation, led by softwood lumber prices, which are now at their highest price levels in history.”
In February, crude oil price per barrel was $53.24 an 11.5 percent increase month over month and an 8.7 percent drop year over year. While less than February 2020, crude oil prices remain at their highest level since March 2020.
Increased energy prices can reduce household disposable income and increase manufacturing and delivery costs, Stoskopf says. In the past year, the average sales price of existing homes in the region has escalated year over year by 15 percent, driven mainly by limited inventory. Likewise, new home permit values have increased by 19 percent primarily due to increased material prices.
North American vehicle production is down 5.6 percent from January and 20.4 percent from February 2020; 1,126,971 units were produced.
The workforce decreased 6.1 percent to 1,892,351 from January and 6 percent from February 2020. The number of people employed is 1,789,994, a 1 percent decrease from January and a 7 percent decrease year over year.