Article source: ConstructConnect
Given the increases in mortgage rates that have transpired, significant slides in homebuilding activity are being taken for granted in the U.S. and Canada. Based on the latest housing starts statistics, this is already underway and clearly apparent in the former more than in the latter. See Graph 8 below, where Canadian housing starts have been moving mostly sideways throughout this year, while U.S. starts have been exhibiting significant declines month to month.
The monthly seasonally adjusted and annualized (SAAR) figure on housing starts in the U.S. has dipped below 1.5 million units in four of the last five months. Prior to this past July, they were above 1.5 million units in 16 straight months, topping out at 1.805 million units in April 2022.
A cause of more concern than the ‘starts’ numbers, however, is how residential building permits have been performing. The permits data series usually provides a couple of months forward glimpse into where starts will be heading. The permits numbers have turned nasty.
Graph 1 highlights the extent of the coming damage. Total U.S. residential building permits have been cratering for most of 2022.
