Housing starts in December surged to an annual rate of 1.608 million, an increase of 16.9% compared with November and up 40.8% compared with December 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 1.055 million, an increase of 11.2% compared with 949,000 in November.
Starts of multifamily properties (five units or more per building) were at a rate of 536,000, an increase of 32.0% compared with 406,000 the previous month.
An estimated 1,289,800 housing units were started in 2019, an increase of 3.2% compared with 1,249,900 in 2018.
Building permits were at a seasonally adjusted annual rate of 1.416 million. Although this is down 3.9% compared with November it is up 5.8% compared with December 2018.
Permits for single‐family homes were at a rate of 916,000, down 0.5% compared with 921,000 in November.
Permits for multifamily properties were at a rate of 458,000, a decrease of 11.1% compared with 515,000 the previous month.
An estimated 1,368,800 housing units were authorized by building permits in 2019 – up 3.9% compared with 1,317,900 in 2018.
The recent ramp-up in housing starts is welcome news to mortgage lenders, as home sales have been constricted due to limited supply. This lack of supply has resulted in pent-up demand and has helped keep home prices on the rise.
“Limited existing homes available for sale have made for a competitive market, resulting in a busier-than-anticipated January,” says Odeta Kushi, deputy chief economist for First American, in a statement. “The market is ripe for homebuilders to ramp up new home construction to meet the growing demand. [The] increase in single-family permits is a welcome sign of new inventory to come.”
Housing completions in December were at a seasonally adjusted annual rate of 1.277 million, an increase of 5.1% compared with the previous m month and an increase of 19.6% compared with a year earlier.
Completions of single‐family homes were at a rate of 912,000, an increase of 0.7% compared with 906,000 in November.
Completions of multifamily units were at a rate of 357,000, an increase of 19.4% compared with 299,000 in November.
An estimated 1,250,600 housing units were completed in 2019, an increase of 5.6% compared with 1,184,900 completed in 2018.
“Housing demand has outstripped supply since 2009,” Kushi adds. “The last report of 2019 represents modest progress towards bridging the gap between supply and demand, as the number of completed homes, which is additional new net supply added to the housing stock, increased by nearly 20 percent compared with a year ago.”