Housing starts jumped in December to reach an annual rate of about 1.089 million units, an increase of about 4.4% compared to the revised November estimate of about 1.043 million units, according to estimates released jointly by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
This is about 5.3% above the December 2013 rate of about 1.034 million units.
Single-family housing starts in December increased 7.2% to reach an annual rate of about 728,000 units, compared to November's 679,000 units, while starts of multifamily units were down 4.2% at 339,000 units compared to November's 354,000 units. This reverses the trend for the majority of 2014 when starts of multifamily units were increasing at a faster rate than single-family units.
Looking at 2014, an estimated 1.006 million housing units were started last year, an increase of about 8.8% compared to 924,900 units in 2013.
Building permits in December were at a seasonally adjusted annual rate of about 1.032 million, an increase of about 1.9% compared to the November rate of about 1.052 million, but down 1.0% compared to the December 2013 estimate of 1.022 million.
Single-family authorizations in December were at a rate of about 667,000, an increase of about 4.5% compared to the revised November figure of about 638,000. Authorizations of units in buildings with five units or more were at a rate of 338,000, down 12.4% compared to November's 386,000.
An estimated 1.033 million housing units were authorized by building permits in 2014, an increase of about 4.2% compared to the 2013 figure of 990,800 units.
About 927,000 new homes were completed in December, an increase of about 6.3% compared to the revised November estimate of about 872,000 units and about 19.6% compared to the December 2013 rate of about 775,000 units.
Of these completed new homes, about 667,000 were single-family homes – an increase of about 9.5% compared to the revised November rate of 609,000 units – and about 254,000 were multifamily units.
An estimated 883,000 housing units were completed in 2014, an increase of about 15.5% compared to the 2013 figure of 764,400.
Looking at December's results regionally, the Northeast posted a 12.5% gain in single-family and multifamily construction, the South was up 8.8% and the West registered a 5.8% increase. The Midwest saw a 13.3% decline in new home construction activity compared to November.
Kevin Kelly, chairman of the National Association of Home Builders (NAHB), says the results for December ‘continue to be in line with our recent surveys, as builders have been increasingly optimistic.’
‘With overall starts ending the year above 1 million units for the first time since 2007, we expect this momentum to carry forward in 2015,’ adds David Crowe, chief economist for NAHB, in a statement. ‘A growing labor market and strengthening economy will spur steady growth in single-family housing production in the year ahead.’
NAHB reported on Tuesday that builder confidence in the market for newly built single-family homes declined one point to reach a score of 57 on the NAHB/Wells Fargo Housing Market Index.
Kelly, however, points out that builder confidence improved during the course of 2014, in reaction to the ‘gradual improvement that is occurring in many markets throughout the nation.’