End of Year Housing Starts Reach 13-Year High

January 17th, 2020 by Editor

Total housing starts increased 16.9% in December to a seasonally adjusted annual rate of 1.61 million units, according to the latest report from the U.S. Housing and Urban Development (HUD) and Commerce Department. This is a 13-year high for housing starts, reports the National Association of Home Builders (NAHB).

“The solid housing production numbers are in line with strong builder sentiment, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB chairperson Greg Ugalde.

The December reading of 1.61 million starts is the number of housing units builders would start if they kept the existing pace for 12 months. Within this overall number, single-family starts increased 11.2% to a 1.06 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 29.8% to a pace of 553,000.

“The year ended on a high note with solid gains in single-family and multifamily production,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president of forecasting and analysis. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”

Total housing starts for 2019 were 1.29 million, a 3.2% gain over the 1.25 million total from 2018. Single-family starts in 2019 totaled 888,200, up 1.4% from the previous year. Multifamily starts in 2019 totaled 401,600, up 7.3% from the previous year.

On a regional and year-to-date basis, combined single-family and multifamily starts in December are higher in the Northeast (+3.0%) and South (+8.6%) but are down in the Midwest (-0.8%) and West (-4.7%).

Overall permits, which are a harbinger of future housing production, decreased 3.9% to an annualized rate of 1.42 million units in December. Single-family permits decreased 0.5% to a 916,000 rate, while multifamily permits also fell 9.6% to a pace of 500,000.

Looking at regional permit data on a year-to-date basis, permits are higher in the Northeast (13.4%), Midwest (0.1%), South (5.1%) and West (0.1%).

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