The numbers for November residential construction permits and housing starts came in higher than expected, marking the second straight
month of increases and putting the rate for both well ahead of last year. Housing
completions were down significantly but still maintained a year-over-year edge. The Census Bureau and the Department of Housing and
Urban Development said building permits nationwide were at a seasonally
adjusted annual rate of 1,482,000 during the month, up 1.4 percent from a
slightly revised October rate of 1,461,000. Construction authorizations are now up 11.1
percent from the November 2018 rate of 1,334,000.
The permit results defied expectations that they would
decline after their strong showing in October when they posted a 5.0 percent
gain. The consensus of analysts polled
by Econoday was for a permitting rate of 1,410,000 with a range of 1,380,000
to 1,450,000. Single family permits rose 0.8 percent from October to
a rate of 918,000 units, 8.9 percent higher than a year earlier. The initial estimate of 909,000 units in
October was revised up to 911,000. Permits for multifamily units were up 4.4
percent for the month and 16.4 percent year-over-year to a rate of 524,000 units. On a non-seasonally adjusted basis there were 108,100
permits for residential construction issued in November, 63,500 of them for
single-family units. The comparable
numbers in October were 131,700 and 79,800. For the year-to-date (YTD) through November, there
have been 1,259,500 permits issued compared to 1,224,800 for the same period
last year, a 2.8 percent increase. Single-family permits for the YTD total
790,800, down 1.1 percent from last year, and multifamily permits for the first
11 months are10.2 percent higher at 430,500 units.
Housing starts rose 3.2 percent from October to a
seasonally adjusted rate of 1,365,000 units, an annual gain of 13.6
percent. The October number, already a
3.8 percent increase from September, was revised from 1,314,000 to 1,323,000. Starts were higher than the consensus estimate of
1,340,000 units and on the high end of the range of analysts' forecasts which
ranged from 1,293,000 to 1,390,000 units. Single family starts were at a seasonally adjusted rate
of 938,000, up 2.4 percent from October's rate of 916,000. That, however, was a
downgrade from the 936,000 units originally reported. Multifamily starts gained 2.3 percent to rise
to a rate of 404,000 units. This was 4.4 percent higher than starts a year
earlier. On a non-adjusted basis there were 103,500 residential
starts in November, down from 113,700 the prior month. Single family starts also fell to an estimated
68,300 compared to 77,300 in October. YTD starts total 1,180,600 compared to 1,173,900
during the first 11 months of 2018, a 0.6% gain. Single family starts are down
0.4 percent to 819,700 and multifamily starts increased by 3.0 percent to 348,600.
Lawrence Yun, Chief Economist for
the National Association of Realtors, provided the following assessment of the
construction numbers. "The latest housing starts numbers are good and rising,
but still short by 135,000 compared to the long term average - and well short
of the 5 to 6 million that is now needed to fully end the housing shortage.
More home construction appears to be on the way as we move into 2020, as
reflected in the very high confidence of home builders. They are clearly
recognizing an improved business opportunity. Some innovation in the industry
is required as construction workers are hard to obtain in the current tight job
market conditions. Modular factory-produced aspects need to be considered more
intently to boost productivity. Overall, more construction will mean
more housing inventory to choose from for consumers. Home sales can then easily
rise while taming the fast growth in home prices."
While completions dropped by 6.6 percent from October,
there were 7.3 percent more units brought on-line than a year earlier. The seasonally adjusted estimate was
1,188,000 units, 883,000 of which were single-family, a 3.6 percent decline. The
number of multifamily units completed fell 16.0 percentOn an unadjusted basis there were 98,100 units
completed during the month, down from 113,900 in October. Single family
completions fell from 83,300 in October to 75,300. For the YTD there have been 1,128,500 units completed,
a 4.0 percent increase from the same point in 2018. Single family completions rose 6.1 percent to
811,600 and there was a 1.0 percent dip in the number of multifamily units
completed to 308,700. At the end of November there were 1,170,000 units
under construction, 526,000 of which were single-family units. In addition,
there were 188,000 permits that had been issued but under which construction
had not started. Eight-nine thousand of
those were for single-family homes.
Permitting in the Northeast rose 18.1 percent from
November and is running 26.4 percent ahead of November 2018. Starts were down
by 3.7 percent and 4.6 percent from the two earlier periods and completions fell
by 11.6 percent and 13.0 percent respectively. The Midwest saw permitting increase 15.1 percent from
October and 16.4 percent on an annual basis. There were 15.5 percent fewer
starts than in October and 4.5 percent fewer completions, but each category was
up year-over-year, by 9.7 percent and 9.5 percent respectively. Permitting was down 4.7 percent from the prior month
in the South but remained 4.4 percent higher than a year earlier. Starts rose
10.3 percent and 13.4 percent from October and November 2018 respectively.
There were 0.9 percent fewter completions than the previous month but 17.0 percent
more than a year earlier. There was an increase of 1.3 percent in permits issued
in the West compared to October and they rose 16.8 percent year-over-year.
Starts increased by 1.4 percent and were 22.7 percent higher on an annual
basis. Completions were down for both periods, by 16.1 percent for the month
and 2.6 percent annually.