Tuesday, December 20, 2011

Housing Starts Jumped 9.3% in November

Housing starts rose to 685,000 annualized units in November, up 9.3% from the revised October pace. Permit issuance continues to grow as well, rising 5.7% in November. This suggests that the rate of new construction could continue to accelerate.

The more volatile multi-family starts lead growth, jumping 25.3% to an annualized rate of 238,000 units. Single-family starts grew less rapidly at 2.3%, but still account for the majority of starts at an annual pace of 447,000 units.

Permit issuance trends suggest that gains will continue in December as permit issuance grew by 5.7% to an annualized level of 681,000 permits. The issuances suggest that multi-family starts are likely to continue driving growth, as multi-family permits grew by 13.9%. Single-family permits rose by 1.6%.

Although the growth in housing starts is encouraging, it is growing from a low base. Historically housing starts are near 1.5 million units per year. Although we have seen some recovery, we are a long way off from those levels.

Read the report.

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