A total of 260 single family home permits were issued in metro Detroit in September, down from the August 2022 total of 319 permits, and 40 percent lower than the 432 permits issued in September 2021, according to the latest HBA and Carter Lumber Southeastern Michigan Residential Building Activity Report compiled by the Home Builders Association of Southeastern Michigan (HBA).
The HBA’s econometric model had projected 301 permits for the month. September’s result marks the slowest September for single family home permits since 2011 at 244. As noted during the last few months, the baseline rate for 30-year fixed mortgages continues to be the biggest factor contributing to the permit slowdown.
The 30-year rate, plus points, increased to 6.91 percent in September. It is up by 3.3 basis points compared to September 2021 and at its highest level since August 2008 — 7.18 percent — during the midst of the Great Recession.
During the same period, multi-family (for rent) construction resumed its upward trend in September with another 312 permits, bringing the year-to- date total to 2,059. This makes 2022 the best start to the year for multi-family permits since September 1998 at 3,914.
The industry metrics used to forecast permit totals showed more neutral and negative trends than positive. The number of employed people went up 0.2 percent month-over-month and 2.7 percent year-over-year, while the available workforce gained 0.2 percent month-over-month as well, but is down 0.8 percent for the year.
In other economic news, North American vehicle production dropped 5.1 percent month-over-month, but is still up significantly year-over-year, increasing by 40.2 percent. The price per barrel for crude oil dropped 11.8 percent on the month, but gained 44.8 precent on the year.
The average value of an existing single family home permit was down 6.8 percent to $284,310 on the month, which marks also a 1.8 percent drop year-over-year. The value of a new single-family permit showed positive signs, increasing to $358,735, a 4.1 percent increase month-over-month and a 20.7 percent increase year-over-year.
