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NJ Homebuilders Spring Into Spring


by Patrick J. O'Keefe, Director of Economic Research

View accompanying chartbook.

New Jersey’s homebuilders put the winter behind them, increasing by more than half the number of building permits obtained in March relative to February. [Charts attached.]

But despite the surge in March, the winter’s chill was still evident: approvals in the first quarter were 8.3% below 2014’s comparable period.

Month-on-month the total number of permits issued jumped 57.5%, with an almost two-thirds (63.8%) increase in multifamily authorizations bolstered by a 50.5% gain in single-family approvals. [Charts 3, 8, 12]

Even after adjustment for seasonal fluctuations, the monthly permit total rose sharply (up 11.5%), which suggests that March’s gains may have included activity that had been delayed by the disruptive weather in 2015’s early months. [Chart 6]

Year-on-year homebuilding approvals in March were substantially (20.4%) below March 2014, with the decline attributable to an almost one-third (31.7%) drop in multifamily authorizations; single family approvals were essentially unchanged (-0.5%) compared to a year ago.

Adjusted data: Multifamily authorizations tend to be lumpy (i.e., individual approvals authorize the construction of numerous units). On the other hand, single-family permits, which authorize the construction of individual units, fluctuate with weather conditions.

Adjusting for those factors – by using a three-month moving average of seasonally adjusted data – approvals slipped modestly (-1.0%) from February’s level. [Chart 7]

Outlook: Notwithstanding the impacts of the first quarter’s disruptive weather, homebuilding in New Jersey is expected to accelerate through the summer and, as a result, achieve its best performance since 2006.

The statements, opinions, and conclusions contained herein are based solely upon the author’s own studies, research, and personal experience. Neither CohnReznick nor the author make any representation or warranty as to the accuracy or completeness of this information. CohnReznick and the author expressly disclaim any liability for any loss or damage which may be incurred, of any kind whatsoever, as a result of or arising from the use of any of the information contained herein or reliance on the accuracy or completeness of it.

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