Another surge for housing starts
Single-family starts rise 2.4% above the October revised rate.
With mortgage rates remaining low, employment on solid ground and the U.S. economy continuing to move ahead, the housing market continues to roll.
Housing starts in November increased 3.2% to a seasonally adjusted annual rate of 1,365,000 from the revised October estimate of 1,323,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported today. This is also 13.6% above the November 2018 rate of 1.2 million.
Previous data for October had placed homebuilding increasing to a rate of 1.314 million units.
Single-family starts in November were at a rate of 938,000, which is 2.4% above the revised October figure of 916,000. The multifamily sector, including apartment buildings and condos, increased 4.9% to a pace of 427,000 units.
By region, total starts fell 3.7% in the Northeast but single-family starts leaped 67.6%. Starts in the Midwest plummeted 15.5% as single-family starts declined 0.8%. In the South, total starts ascended 10.3% but single-family starts are down 4.1%. Combined starts increased 1.4% in the West while single-family starts are up 8.8%.
Total housing permits in November rose 1.4% to a seasonally adjusted rate of 1.482 million above the revised October rate of 1,461 million. The latest report is 11.1% above the November 2018 rate of 1.334 million.
Single-family permits edged up by 0.8% to a rate of 918,000 while multifamily permits increased 2.5% to a 564,000 pace.
By region, total permits increased 18.1% in the Northeast as single-family permits rose 18.8%. In the Midwest, total permits jumped 15.1% but single-family permits fell 6.7%. Total permits declined 4.7% in the South as single-family permits slipped 1.3%. Permits in the West increased 1.3% as single-family permits climbed 5.9%.
Despite the upward trend, National Association of Realtors Chief Economist Lawrence Yun says more housing production is needed.
“The latest housing starts numbers are good and rising, but still short by 135,000 compared to the long term average — and well short of the 5 to 6 million that is now needed to fully end the housing shortage,” Yun said. “More home construction appears to be on the way as we move into 2020, as reflected in the very high confidence of home builders. They are clearly recognizing an improved business opportunity. Some innovation in the industry is required as construction workers are hard to obtain in the current tight job market conditions. Modular factory-produced aspects need to be considered more intently to boost productivity. “
Yun also noted that additional production will mean more options for potential home buyers, as well as a possible taming of rising price tags.
“Overall, more construction will mean more housing inventory to choose from for consumers. Home sales can then easily rise while taming the fast growth in home prices,” Yun said.
The latest housing data follows yesterday’s report that builder confidence in the market for newly-built single-family homes increased five points to 76 in December off an upwardly revised November reading. This is the highest reading since June of 1999, according to the National Association of Home Builders (NAHB).
“Market conditions for single-family starts are positive, given a lack of resale inventory, low interest rates and a solid job market,” said Greg Ugalde, chairman of the NAHB and a home builder and developer from Torrington, Conn. “Builder confidence points to additional gains as we look forward.”
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