SINGLE-FAMILY PERMITS LAG IN MAY AS MULTIFAMILY SURGES

Based on residential permit data compiled by HBAand reported in the HBA/Carter Lumber Southeastern Michigan Residential Building Activity Report™ a total of 308 single-family home (SFH) permits were issued in Macomb, Oakland, St. Clair and Wayne counties in May 2022.

May’s total was 13 percent lower than April 2022’s revised total of 355 permits and 35 percent lower than the total for May 2021 (473). HBA’s econometric model had forecast a total of 389 permits for the month. Meanwhile, average permit values continue to increase, remaining up 17 percent year-over-year ($352,575).

Multifamily (for rent) construction surged, adding a remarkable 587 permits in May. This brings 2022’s year-to-date total to 1,329 which is the highest level to start a year since 1998 (1,926).

The biggest factor contributing to both the SFH slowdown and the multi-family for rent surge continues to be the rise in the baseline 30-year fixed rate mortgage. As reported monthly by Freddie Mac, the 30-year rate, plus points, rose again to 6.13 percent representing an increase of nearly 2.5 basis points over May 2021. This measure is now at its highest point since November 2008 (6.79%), during the Great Recession.

The continuing rise in average new permit values and existing SFH prices, combined with higher interest rates, creates affordability issues, thus driving the surge in multifamily for rent construction. Material and labor cost inputs to new construction continue to be up significantly, namely lumber and oil prices, compared to pre-pandemic levels, even while lumber has decreased from its recent peak price.

On a positive note, the number of people employed in the region (+4%) and North American Vehicle Production (+23%) are both up significantly compared to May 2021. HBA’s permit forecast for the next six months shows a continued slowdown.

NOTE: The graphs presented above - along with additional data and charts - can be found each month, in larger format, by going to www.builders.org; Log in using your Member ID#, Mouse Over the menu item "Building News & Metrics" Selecting "Industry Related Metrics" from the fly-out menu.

MAKE YOUR RESERVATIONS FOR THE HBA & AAM ANNUAL PICNIC AND MICHAEL STOSKOPF RETIREMENT PARTY: AUGUST 10 AT NOON

Please join us on Wednesday, August 10 at The Links of Novi Singh to network with members while enjoying lunch. This is also your chance to give Michael Stoskopf, retired CEO of HBA, your good wishes and support the Walter R. Stoskopf Memorial Skilled Trades Scholarship.

The cost to attend is $20 per person. A portion of the proceeds from this event will be donated to the skilled trades scholarship, part of HBA's 501 (c) 3 Charitable & Educational Foundation.  Your support will be recognized in the October 2022 isue of Building Business & Apartment Management Magazine.

This Event Is Limited To The NEXT 80 Who Register. Please limit your reservations to four people per company.

Lunch Sponsorships for this event are also available at $500 each, including 2 admissions to the event. Contact Riva at 248-862-1002

Registration Deadline to attend or sponsor is August 1, 2022, or when the event is sold out. PLEASE REGISTER ONLINE TODAY

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WELCOME NEW MEMBER

ASSOCIATE MEMBER
BRANDON RUBENSTEIN, DEFINED MORTGAGE II
SPONSOR: PATRICK QARANA, TRIUMPH BUILDING CO LLC

THANK YOU RENEWING MEMBERS

BUILDER MEMBERS
DEWAYNE WHITE, D W DEVELOPMENT
LORENZO RANDAZZO, L & R HOMES INC
MARIO GIANNANDREA, STONE HOLLOW PROPERTIES & DEVELOPMENT

ASSOCIATE MEMBER
MICHAEL J. GORDON, RA, MOISEEV/GORDON ASSOCIATES, INC

BUILDER-REMODELER MEMBERS
JOHN BLOOMINGDALE, BLOOMINGDALE HOMES, INC.
MARK FREGO, CONSTRUCTION UNLIMTED
DOMINIC J. MOCERI, MOCERI MANAGEMENT CO.

SUBCONTRACTOR MEMBERS

ANTHONY SEEFRIED, CARPENTRY BY TONY INC.

AFFILIATE MEMBERS
ERIC BLOOMINGDALE, BLOOMINGDALE HOMES, INC.
LIZ THOMAS, INFINITY HOMES & CO.