Housing Starts Jumped in November as Production Continued to Accelerate

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Housing starts jumped for a second straight month in November, rising to an adjusted annual rate of 1.365 million, an increase of 3.2% compared with October and an increase of 13.6% compared with November 2018, according to estimates from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Starts of single-family homes were at an annual rate of about 938,000, an increase of 2.4% compared with about 916,000 in October.

Starts of multifamily properties (five units or more per building) were at a rate of 404,000, an increase of 2.3% compared with 395,000 in October.

It should be noted that HUD and the Census Bureau routinely adjust the previous month’s estimates.

Regionally, and on a year-to-date basis, combined single-family and multifamily starts in November increased 0.9% in the Northeast and 7.4% in the South. However, starts were down 5.8% in the Midwest and 8.7% in the West.

Building permits also increased in November, rising to an annual rate of 1.482 million. That’s an increase of 1.4% compared with the previous month and an increase of 11.1% compared with a year earlier.

Permits for single‐family homes were at a rate of about 918,000, an increase of 0.8% compared with about 911,000 in October.

Permits for multifamily dwellings were at a rate of 524,000, an increase of 4.4% compared with about 502,000 in October.

Regionally, total combined permits increased 11.6% in the Northeast and 4.8% in the South. However, permits were down 3.3% in the Midwest and 0.6% in the West.

Housing completions were at a rate of 1.188 million, down 6.6% compared with the previous month but up 7.3% compared with a year earlier.

Completions of single‐family homes were at a rate of about 883,000, a decrease of 3.6% compared with 916,000 in October.

Completions of multifamily units were at a rate of about 295,000, a decrease of 16.0% compared with 351,000 in October.

“This month’s housing starts data gave an encouraging sign with over 1.48 million housing permits, a 12.5-year high,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Home building is beginning to accelerate to keep up with the pace of household formation.

“Single-family homebuilding, which accounts for the largest share of new construction in the housing market, increased to its highest level since January,” Kushi says. “Even better is the single-family permits data, [which] at 918,000 reached its highest point been since July 2007.”

“Permits are a leading indicator of future starts, so this is another nod to the expected strength of demand in 2020,” she adds.

However, despite the recent increases in production, “building will have to exceed household formation for a number of years to reduce the housing stock ‘debt’ we have accumulated,” Kushi says.

“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), in a statement. “Builder confidence points to additional gains as we look forward.”

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

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