Housing starts surge in November
Housing starts hit their stride in November, jumping ahead to their highest level since May.
According to the latest Monthly New Residential Construction report, released this morning, housing starts in November increased 14.8% to a seasonally adjusted annual rate of 1.560 million compared to the revised October estimate of 1.359 million.
The latest report is also 9.3% ahead of the November 2022 rate of 1.427 million.
“Lower interest rates and a lack of resale inventory helped to provide a strong boost for new home construction in November,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “And while these higher starts numbers are consistent with our latest builder survey, which shows a rise in builder sentiment and future sales expectations, home builders continue to contend with elevated construction and regulatory costs.”
Single‐family starts in November surged by 18% to a rate of 1.143 million compared to the revised October figure of 969,000.
“The single-family starts figure is remarkably strong, and we would not be surprised to see this figure revised lower or fall back slightly in the next month, given the nearly 20% rise in November,” said NAHB Chief Economist Robert Dietz. “NAHB is forecasting an approximate 4% gain for single-family starts in 2024, as mortgage rates settle lower, economic growth slows and inflation moves lower.”
The November rate for units in buildings with five units or more was 404,000, increasing 8.9% compared to 371,000 in the previous month.
Housing units authorized by building permits in November declined 2.5% to a seasonally adjusted annual rate of 1.460 million from the revised October rate of 1.498 million. The latest permits figure is also 4.1% below the November 2022 rate of 1.402 million.
Single‐family permits increased by 0.7% in November to a rate of 976,000 compared to the October figure of 969,000.
Authorizations of units in buildings with five units or more were at a rate of 435,000 in November, falling 9.6% from the revised October rate of 481,000.
Today's report follows the latest NAHB/Wells Fargo Housing Market Index (HMI), with home builder confidence rising three points in December.
Here’s how starts and permits performed month-over-month on a regional basis:
In the Northeast, total housing starts showed a 100% increase as single-family starts ascended by 43%. Overall housing permits dropped by 34.4% as single-family permits dipped by 1.7%.
Total starts in the Midwest increased by just 1% but single-family starts increased by 50%. Combined permits in the Midwest are 12.4% above the prior month with single-family permits moving up by 1.8%.
In the South, total starts moved forward by 16.3% while single-family starts rose 16.9%. Total permits fell 6.7% with single-family starts down 1.7%.
The West saw total starts increase by 2.1% as single-family starts fell by 0.8%. Overall permits increased by 12.1% as single-family starts climbed by 7.8%.
