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NJ Homebuilding Up Sharply


4/24/14

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

View accompanying chartbook.

Authorizations to start construction on new homes in New Jersey rose sharply (50.1%) in March. [Chart 1]

Homebuilders obtained 2,330 construction permits in March, the largest number since last August. 

Year-to-date, residential approvals are running well ahead (41.5%) of 2013’s comparable period. Single-family units are up by more than one-quarter (27.6%) and multifamily by more than one-half (52.3%).

As has been the case for much of the State’s recovery in residential construction, the growth was concentrated in the multifamily sector [Chart 3].  In March alone, approvals of attached units (largely apartments) accounted for almost two-thirds (63.9%) of the total.

Permit data tend to be volatile month-to-month. Multifamily permits authorize the construction of multiple residences over a period of time, but all of the units are recorded at the time of approval, which makes the counts lumpy. Single-family permits, on the other hand, typically issue immediately before construction of a unit is about to commence and, therefore, are seasonally sensitive.

Adjusted for seasonal fluctuations, March’s authorizations were the second highest total since mid-2008. May 2013’s total was a bit higher; August 2013’s identical. [Chart 4] 

But that longer-term perspective underscores the importance of multifamily construction to homebuilding’s rebound in New Jersey. Single-family authorizations soared in March, but when adjusted for seasonality, have been flat since the start of the year at a level somewhat below the second half of 2013. [Charts 6 and 8]

The increase in the number of approvals bodes well for employment and spending in New Jersey’s construction related industries.


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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Patrick O'Keefe

Director of Economic Research

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