May Residential Permit Snapshot

Happy 4th of July Eve! Permit numbers for May are below, we’ll keep it brief so you can get back to your celebration prep!

Single Family

For single family homes, the monthly total of 2,740 was 21.51% higher than the count from a year ago while the trailing 12-month number of 29,657 is slightly above the average since 2000 (26,214). The monthly number is also above both the 12-month average, meaning we are still in a rising market when it comes to homebuilding.

On the Wall Street front, XHB (SPDR S&P Homebuilders ETF) has mostly been moving sideways. Current price as of the 6/27 market close is $100.89, slightly below the peak $111.35 on March 28. It’s still above its 200-day moving average but has been trading below its 50-day. As the spread between the 50 and 200-day narrows, it will be interesting to see if it crosses into bearish territory or stays bullish.

Multifamily

Multifamily permits came in at 467, which was 40.40% lower than a year ago. The trailing12-month count came in at 19,210, a retreat from the November ‘23 peak of 23,024 but 2.18x the long-term average of 8,800. The 467 count is the lowest monthly we’ve seen in the last five years besides: January 2023 (477), March 2021 (387) and September 2020 (173).

The FTSE NAREIT Equity Apartments Index has been in an uptrend since Q4 of last year. It closed at $461.03 on June 27th, putting in line with where it was trading in February of 2023. It has maintained its bullish stance, with the 50-day staying above the 200-day. For reference, its pre-Covid high was $526.78,

Combined

The combined trailing 12-month permit count rose 5.63% over the previous year but declined 20.52% from last month. The increase in single family permits was offset by the very low count in multifamily. With the single-family T12 number hovering around its long-term average, the well above average combined count can be attributed to the still elevated multifamily numbers.

Thanks for reading, as always, please reach out with anything we can help you with.

Thanks,

John & Ramey