The National Association of Home Builders (NAHB) offered its analysis of the surge in housing starts, describing strong momentum lead by multi-family construction.
Yesterday the Commerce Department reported housing starts increased 12.1% to a seasonally adjusted annual rate of 954,000 units.
“Builders have become increasingly optimistic about conditions in local housing markets in recent months, and this report underscores that the housing recovery is well on its way,” said Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Fla. “With inventories of new homes at razor thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand.”
The December housing starts report bodes well for 2013, a year in which the NAHB forecast total housing starts to rise to 932,000 for 2013. There were 780,000 starts in 2012.
“Overall, this report represents a solid ending to 2012 and a promising start to 2013,” said NAHB senior economist Robert Denk. “Multi-family production is almost back to normal levels and while single-family starts still have a way to go, they are gaining momentum. This trend could be even stronger if not for persistently tight credit conditions for home buyers, flawed appraisal values and uncertainties regarding economic policy debates in Washington.”
Single-family housing starts rose 8.1% to a seasonally adjusted annual rate of 616,000 units in December, while multi-family production jumped 23.1%, to 338,000 units.