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NJ Housing Approvals Decline In August


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

View accompanying chartbook.

New Jersey’s homebuilders obtained 2,015 building permits (i.e., authorizations to undertake construction) in August, down by more than one-third (-35.3%) from July’s total (which was the highest since June 2008). [Charts 1 and 2]

Through the first eight months of 2014, residential construction has had its best start since 2006. Year-to-date approvals totaled 19,496 units, 23.1% more than 2013’s comparable period. [Chart 4]

Authorizations of multifamily (i.e., attched) dwaellings accounted for over three-quarters (78.5%) of the year-to-date increase relative to 2013’s first eight months. 

Multifamily authorizations have accounted for 62.8% of this year’s approvals, a bit less than in the previous month, which recorded the largest share (63.0%) in monthly records dating from 1988. 

Single-family approvals during the year’s first eight months totaled 7,246 units, 12.2% greater than the comparable period in 2013. 

Month-on-month, total authorizations dropped 35.3%. It was the biggest decline since last September, when the number of permits fell by a slightly larger 35.4%.

The month-on-month pull back was due primarily to a 45.0% drop in multifamily authorizations; single-family permits fell by a more modest, but still-significant 13.5%. 

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

Adjusting for those factors – by using a three-month moving average of seasonally adjusted data – August’s approvals were 8.8% less than July’s, when a surge in multifamily units pushed total authorizations to a seven-year high. [Chart 6]

When single-family approvals are adjusted for seasonal fluctuations, August’s authorizations were 6.6% below the prior month’s, but the three month average has been relatively constant since May. [Charts 9 and 10]

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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