A day after the National Association of Home Builders (NAHB) announced that builder confidence in the market for new, single-family homes in November fell to the lowest level since May 2015, the U.S. Census Bureau and U.S. Department of Housing and Urban Development released estimates showing than housing starts increased 3.2% compared with October but were down 3.6% compared with November 2017.
Housing starts in November were at a seasonally adjusted annual rate of 1.256 million, up from a revised October estimate of 1.217 million but down from the November 2017 rate of 1.303 million.
Starts of single‐family homes were at a rate of 824,000, a decrease of 4.6% compared with a revised 864,000 in October.
Starts of multifamily homes (five units or more per building) were at an annual rate of about 417,000, an increase of 24.9% compared with about 334,000 in October.
Regionally, housing starts increased 11% in the West and 5.3% in the South, year-over-year, but fell 0.8% in the Northeast and 1.9% in the Midwest.
Nationally, building permits were at a seasonally adjusted annual rate of 1.328 million, an increase of 5.0% compared with a revised 1.265 million in October and up 0.4% compared with 1.323 million in November 2017.
Permits for single‐family homes were at a rate of 848,000, an increase of 0.1% compared with 847,000 in October.
Permits for multifamily homes more were at a rate of 441,000, up 15.4% compared with 382,000 in October.
Regionally, permits increased 8.2% in the South and 3.2% in the West, year-over-year, but fell 2.7% in the Midwest and 2.8% in the Northeast.
“The decline in single-family production over the last few months makes sense given the drop in our builder confidence index,” says Randy Noel, chairman of NASHB, in a statement. “Builders are cautious to add inventory as housing affordability concerns are causing consumers to pause on making a home purchase.”
“Favorable demographics support healthy housing demand, so it is frustrating that the housing affordability crisis is preventing many consumers from achieving their goal of buying a home,” adds Robert Dietz, chief economist for NAHB. “While homeownership has increased over the last nine quarters, we can expect that upward momentum to stop due to rising home costs. Because housing leads the economy, we need to stabilize residential market conditions.”