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NJ Homebuilding Jumped In July


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

View accompanying charts.

New Jersey’s homebuilders obtained 3,115 building permits (i.e., authorizations to begin construction) in July, the largest monthly total in six years (since June 2008). [Chart 1]

The recent surge in approvals offset the temporary, weather-related weakness during the first quarter of the year. [Charts 2 and 3]

In the first seven months of 2014, residential construction had its best start since 2006.  Year-to-date approvals totaled 17,209 units, 30.0% more than 2013’s comparable period. [Chart 4]

Authorizations of multifamily (i.e., attached) dwellings propelled the year-to-date acceleration, accounting for 10,848 units, 42.4% more than 2013’s first seven months. 

Multifamily authorizations accounted for 63.0% of the year’s approvals, the largest year-to-date share on monthly records dating from 1988. If this proportion holds for the remainder of 2014, the year’s multifamily share will be equivalent to the early 1960s.

Single family approvals totaled 6,361 units, 13.2% more than 2013’s first seven months. 

Month-on-month, the total number of authorizations rose by the largest amount since mid-2008, scoring a gain of 852 units (up 37.7%). 

On the month, single family permits increased moderately (+4.3%) while multifamily authorizations surged (+60.4%). 

Permit data (especially multifamily authorizations) tend to be volatile month-to-month and, like many economic indicators, vary seasonally. 

Adjusting for those factors – by using a three-month moving average of seasonally adjusted data – residential construction is the strongest it has been since January 2007 and is almost triple the housing contraction’s mid-2009 nadir. [Chart 6]

When single family approvals are adjusted for seasonal fluctuations, the year-to-date total was the highest since 2006; single unit authorizations have been relatively stable throughout the year. [Charts 9 and 10]

The year-to-date acceleration in homebuilding approvals in New Jersey augurs well for construction employment for the remainder of the year.

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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