Housing starts decreased 1.8% in November compared with October to a seasonally adjusted annual rate of 1.289 million, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
That’s down 14.6% compared with November 2023.
Starts of single-family homes increased 6.4% to an annual rate of 1.011 million, while starts of multifamily homes (five units per building) decreased 24.1% to a rate of 264,000.
Building permits were a bright spot: They increased 6.1% – above expectations – to a seasonally adjusted annual rate of 1.505 million.
However, year-over-year permits were down 0.2%.
Permits for single-family homes increased 0.1% compared with the previous month to a rate of 972,000. Permits for multifamily dwellings increased 22.1% to a rate of 481,000 in November.
Housing completions in November were at a seasonally adjusted annual rate of 1.6 million, which is 1.9% below October.
Earlier this week the National Association of Home Builders (NAHB) reported home builder sentiment was basically flat in December compared with November, pinned at a low score of 46 on its Housing Market Index (HMI), as high home prices and mortgage rates offset renewed hope about a better regulatory business climate in 2025.
“While single-family starts were up in November, single-family permits were flat as builders face mixed market conditions that include an election result that promises a focus on regulatory relief, but ongoing elevated mortgage rates,” says Carl Harris, chairman of NAHB, in a statement.
“NAHB is forecasting single-family starts to post a slight increase in 2025 as the financing conditions for builders improve modestly,” adds Robert Dietz, chief economist for NAHB. “The significant decline for apartment construction is forecasted to end, with that market stabilizing during the second half of next year.”
Odeta Kushi, deputy chief economist at First American, says home builders are “down on today, but betting on tomorrow as housing starts came in below consensus expectations, while permits outperformed.”
“Yet, despite mortgage rates increasing by nearly 40 basis points in November, starts, permits, and completions were up in the single-family sector,” Kushi says. “The modest increase aligns with a pickup in builder sentiment, which had been on a three-month streak of consecutive increases through November but stayed flat in December.”
“While overall builder sentiment remains in negative territory, sentiment on single-family sales expectations for the next six months rose to the highest since April 2022,” Kushi says. “Despite the negative sentiment about the current market due to elevated mortgage rates and ongoing supply-side challenges, builders are feeling cautiously optimistic about 2025.”
Photo: Jens Behrmann