Analysis of September 2020 Monthly Residential Construction

Single family housing is booming. Low mortgage rates have people extremely interested in buying homes however the supply is struggling to keep up with demand This combined with a pandemic trend of home improvement has sent the cost of lumber sky high hitting all-times highs in August and moderately reducing in price however still ~20% above this time last October.

In April of this year building permits hit an all-time low with uncertainty abound. Since then permits have increased month over month with a 7.8% increase from August to September. Single family home starts have also seen this month over month trend, increasing 8.5% from August to September and 22.3% September ’19 to ’20. Home completions also follow this trend up 2.1% from August and 8.1% year over year.

Developers on the other hand are less optimistic. We see a 1% increase in permits issued since last month but year over year permits are down 22.2%. While many developers went into the year with big plans, units of five or more are down 52.4% YTD and 17.4% y/y. A silver lining to this is that many developers are getting back to finishing their projects with 52.4% increase from August to September and 79/1% increase year over year.