New Housing Starts Rise in U.S., Parallels Builder Confidence Uptick
According to the U.S. Department of Housing and Urban Development and the Commerce Department. This month's reading is a post-recession high, nationwide housing starts in the U.S. rose 3.3 percent in November 2017 to a seasonally adjusted annual rate of 1.297 million units after a downwardly revised October 2017 reading.
Single-family production rose 5.3 percent in November to a seasonally adjusted annual rate of 930,000, which also is the highest post-recession report. Year-to-date, single-family starts are 8.7 percent above their level over the same period last year. Meanwhile, multifamily starts fell 1.6 percent to 367,000 units after a strong October reading.
"The increase in single-family production is consistent with builder confidence gains, and shows builders are optimistic about new federal policies aimed to promote small business growth," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas.
"The strong November reading indicates that builders are continuing to increase single-family production to meet growing demand for housing," said NAHB Chief Economist Robert Dietz. "With low unemployment and increasing owner-occupied household formation, single-family starts should continue to make gains in 2018."
Regionally in November, combined single- and multifamily housing production rose 19.0 percent in the West and 11.1 percent in the South. Starts fell 12.9 percent in the Midwest and 39.6 percent in the Northeast.
Overall permit issuance in November was down 1.4 percent to a seasonally adjusted annual rate of 1.298 million units. Single-family permits rose 1.4 percent to 862,000 units while multifamily permits fell 6.4 percent to 436,000.
Permits rose 1.4 percent in the South. Permits declined 3.0 percent in the West, 4.7 percent in the Midwest and 5.7 percent in the Northeast.
NAR Chief Economist Lawrence Yun commented the November 2017 housing starts data by stating; "A welcoming trend is developing in the housing sector as builders are able to bring more supply to the market on a consistent basis. The latest monthly figure of near 1.3 million annualized housing starts is solid, and the growth is mostly coming both in the West and for single-family homes."
Yun further said, "There is still more room for improvement, as the latest figure is still not yet at the long-term 50-year average of producing 1.5 million units per year. If this rising trend continues, the worst of the supply shortage could soon end, which would help slow price appreciation in 2018. That would be a huge, welcoming relief for renters seeking to become homeowners."