FEBRUARY IMPROVES SLIGHTLY BUT WINTER MAINTAINS ITS GRIP
Based on residential permit data compiled by the Home Builders Association of Southeastern Michigan (HBA) and reported in the HBA/Carter Lumber Southeastern Michigan Residential Building Activity Report, a total of 264 single-family permits were issued in Macomb, Oakland, St. Clair and Wayne counties in February 2019.
As noted in last month’s forecast, 2015 was the last year we had significant weather impacts due to cold and snowy conditions. In fact, that year the totals for both January and February never broke the 200-permit per month threshold. We are pleased to report that is not the case this year. In fact, February 2019 totals were over 35 percent higher than February 2015 (195). While some of this is attributable to differing actual weather conditions in each year, we believe a large part of the improvement is related to other positive economic factors.
The leading positive economic indicator, with the highest correlation, is the number of people employed in our 4-county area. It’s relatively simple: to buy a new home, you have to have a job. We are back to our highest level of employment since December 2006. With the trailing 12-month average employment also at its highest level since that time, the conditions are prime for renewed permit activity – at least once the weather breaks.
Other leading factors in the forecast include year-over-year increases in the number of people employed, labor workforce and a nearly 20 percent decline in crude oil prices.