Housing permits and starts in November were
mixed when compared to October levels according to figures released this week
by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The seasonally adjusted and annualized figure for permits authorizing housing
units issued in November was 1,506,000. This was 3 percent below the revised
October rate of 1,553,000 and 31.3 percent below the November 2005 estimate
of 2,191,000. These permits included 1,144,000 permits for single family houses
- also a drop of about 3 percent from October numbers.
Housing starts were up 6.7 percent on a seasonally adjusted basis. New construction
was undertaken at a seasonally adjusted annualized rate of 1,588,000 compared
to 1,488,000 in October. Starts, however, were still off 25.5 percent from November
of last year. Single family housing starts ran higher than the overall numbers;
construction began on an estimated 1,281,000 units (annualized,) an increase
of 8.1 percent over October figures.
The slight up tick in starts may reflect the monthly National Association of
Home Builders/Wells Fargo Housing Market Index (HMI) for December
which indicated that single family new home builders may believe that the worst
of the downswing in home buying is over. The index was down
a single point from the November survey but remains above the recent record
low recorded in September.
NAHB has conducted the HMI survey for 20 years. Builders are asked to rate
three measures of market strength on general scales of "poor" to
"good" or very low to very high. The measures are builder perceptions
of current single family home sales; sales expectations for the next six months,
and current buyer traffic. Each measure is scored separately and also used to
calculate a seasonally adjusted index where any number of 50 indicates that
more builders view sales conditions as good rather than poor.
In the current survey the overall HMI was at 32 compared to 33 last month and
30 in September. The component measuring traffic dropped three points to 23;
the component gauging current sales was unchanged at 33 percent and the component
gauging sales expectations for the next six months was up three points to 48
- its third consecutive monthly gain.
NAHB President David Pressly, a home builder from Statesville,
N.C said, "The HMI has come off September's low point, and other recent indicators
confirm that buying conditions have improved and that demand
is stabilizing - including improvements in measures of housing
affordability, strengthening consumer assessments of home buying conditions
and an upswing in applications for mortgages to buy homes. Builders sense that
the tide is turning in terms of buyer demand for their product and are feeling
somewhat better about the prospects for home sales."
Regionally, the HMI posted the biggest gain this time around in the Midwest,
which has shown the greatest weakness in this measure for many months. That
region posted a 7-point gain to 22 on the confidence scale, while the Northeast
was unchanged at 37, the South dropped a point to 39 and the West declined four
points to 31.