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 308 single-family home permits were issued in Macomb, Oakland, St. Clair, and Wayne counties in May 2022.
This figure is 13 percent lower than April 2022’s revised total of 355 permits and 35 percent lower than the total for May 2021 of 473. The econometric model the HBA uses forecasted 389 permits for the month.
At the same time, multi-family construction surged in May, adding 587 permits, bringing the 2022 year-to-date total to 1,329, the highest level to start a year since 1998, which saw 1,926 permits issued at that time.
The rise in the baseline 30-year fixed rate mortgage is the largest contributing factor to the drop in single-family permits and rise in rental units. Freddie Mac reported the rate, plus points, rose to 6.13 percent in May, representing an increase of nearly 2.5 basis points since May 2021.
Other industry metrics used to forecast permits show a mixed bag. The number of employed people is up 4 percent year-over-year, but down 1.3 percent from April 2022. The available workforce is up 1.6 percent year-over-year and down 1.7 percent month-over-month.
North American vehicle production saw a year-over-year jump of 22.9 percent and month-over-month gain of 1.5 percent. The per barrel price of oil began to drop month-over-month, going down 8.1 percent to $102.75. That number is still up 64.6 percent year-over-year.
Despite the drop in total single-family permits, the value is up 17.2 percent year-over-year to $352,575. That is a 2.8 percent increase month-over-month. The average value of a multi-family permit increased 4 percent to $308,097 year-over-year, which is a 4.1 percent month-over-month increase.