The Michigan housing industry is slowly recovering from the economic decline that started earlier this year.
According to the latest numbers from the Home Builders Association of Michigan, a total of 1,587 permits for new single-family housing were issued in June statewide compared to 1,547 in June 2019.
In total, 6,046 single-family home permits were issued across Michigan from January through June, which is still less than 7,134 permits issued during the same time in 2019.
“We are cautiously optimistic regarding an increase in June permit numbers compared to last year,” said Bob Filka, CEO of HBAM. “It is encouraging that despite an economic downturn, labor shortages and regulatory challenges, home construction permits continue to rise. The fact that increasing permits exceed our forecast is a further reason for optimism.”
HBAM has long used an econometric model to provide forecasts of new home permit activity expected across the state. With the advent of COVID-19, that model had to undergo adjustment. Based on outlooks by national economists, a “V-shaped” factor was incorporated into the forecasting model, which presumed a four-month impact period, beginning in March, before returning to a seasonal trend in July.
“Despite the statewide shutdown which had a big impact on our industry, the drop in permits for March through May was not as deep as we expected,” Filka said.
With five months of the year remaining, the HBA is now forecasting that a total of 13,556 permits will be issued for calendar year 2020. Moving forward, HBAM’s forecast indicates a return to normal trends by July with the expected seasonal slowdown in late fall.