Multi Housing News August 2012 : Page 16
market pulse Multifamily Starts 250,000 217,000 Finished Goods vs. Construction Materials and Components Percentage Change Month-over-Month 1.5% 1.0% 0.6% Materials & Components for Construction 0.4% 200,000 Units 0.5% 0.3% 150,000 136,000 0.0% -0.5% -1.0% 100,000 0.3% Finished Goods 50,000 May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. ’11 ’12 May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. ’11 ’12 Percentage Change Month-over-Month Multifamily Starts: In April, the seasonally adjusted annual rate of starts in buildings with fi ve or more units increased 4 percent to 217,000 units. However, revisions to previous data indicate the level of multifamily construction activity is even stronger than previously estimated. Following the revisions, the data now show the fi ve-plus starts rate has stayed above 200,000 for three consecutive months— the fi rst time this has happened since those production rates crashed in late 2008. The rate at which permits are issued declined 23 percent in April, slipping to a level of 217,000. That points to a potential drag on fi ve-plus starts over the near term. From a longer perspective, 5+ permits and starts in April were both up strongly on a year-over-year basis, rising by 40 percent and 75 percent, respectively, and have tripled since bottoming out in the second half of 2009. Building Materials 6.0% 4.0% 2.7 2.1 2.2 5.1 4.6 2.0% 0.6 2.0 1.4 1.2 0.4 0.2 0.0% -0.4 -0.6 -1.9 -2.4 -2.0% -4.0% Feb. ’12 Mar. ’12 Apr. ’12 Interest Rates 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Prime Rate 3.25% Prime Rate 3.25% 10-Year Treasury 1.80% Cement Gypsum Softwood Lumber Plywood Steel 10-Year Treasury 3.17% 3-Month Libor 0.26% 3-Month Libor 0.47% May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. ’11 ’12 Building Materials: The aggregate producer price index for resi-dential construction rose 0.2 percent for the month, and the pace of year-over-year increases slowed to 2.9 percent from recent highs between 6 percent and 7 percent in mid-2011. In a surprise develop-ment, gypsum prices declined 1.9 percent between March and April after strong gains through the beginning of the year that had brought prices to 13.8 percent above levels seen at the end of last year. This decline brings the year-to-date gain in gypsum prices down to 11.6 percent over 2011. Producer price indexes for other home building materials showed softwood lumber prices rising 1.4 percent in April, while concrete prices declined 0.2 percent. 16 August 2012 | Multi-Housing News
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