November a Positive Month for Single-Family Starts

December 17th, 2019 by Editor

Total housing starts increased 3.2% in November to a seasonally adjusted annual rate of 1.37 million units, according to a report from the U.S. Housing and Urban Development (HUD) and Commerce Department.

The November reading of 1.37 million starts is the number of units builders would begin if they kept this pace for the next 12 months. Within the overall number, single-family starts increased 2.4% from recent months’ downwardly revised estimates to a seasonally adjusted annual rate of 938,000. The multifamily sector, which includes apartment buildings and condos, increased 4.9% to a pace of 427,000.

“Since the rebound in housing took hold earlier this year, single-family starts have posted a steady improvement in the pace of construction,” says NAHB chief economist Robert Dietz. “Under the current estimates, the 2019 year-to-date total for single-family construction is just 0.4% lower than the 2018 sum and is on pace to come in relatively flat for the year.”

On a regional and year-to-date basis, combined single-family and multifamily starts in November are higher in the Northeast (+0.9%) and South (+7.4%) but are down in the Midwest (-5.8%) and West (-8.7%).

“Market conditions for single-family starts are positive, given a lack of resale inventory, low interest rates and a solid job market,” says Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “Builder confidence points to additional gains as we look forward.”

Overall permits, which are a harbinger of future housing production, increased 1.4% to a 1.48-million-unit annualized rate in November. Single-family permits inched up 0.8% to a rate of 918,000, while multifamily permits increased 2.5% to a pace of 564,000.

Looking at regional permit data on a year-to-date basis, permits are higher in the Northeast (+11.6%) and South (+4.8%) and lower in the Midwest (-3.3%) and West (-0.6%).

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