 | Housing Starts Declined 3.0% in November to 861,000 Units at an Annual Rate |
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| Posted Under: Data Watch • Home Starts • Housing |
Implications: The upward trend in home building remains intact. However, as we've been saying all along, the gains won't happen every month. Housing starts fell 3% to an 861,000 annual pace in November, with declines in both single- and multi-family starts. Still, besides last month, starts are at the highest levels since July 2008 and are up 21.6% from a year ago. The total number of homes under construction (started, but not yet finished) are up 22% from a year ago and increased for the 15th straight month, the first time this has happened since back in 1997-98. The best news today was that building permits rose 3.6% in November to an 899,000 annual rate, the highest level since July 2008 and up 26.8% from a year ago, suggesting gains in housing starts in the months ahead. Based on population growth and "scrappage," housing starts will eventually rise to about 1.5 million units per year (probably by 2015), which means the recovery in home building is still young. That may seem like a big leap over the next few years, but a gain of 19% per year for the next three years gets us up to that level. And that pace is slower than the gains over the past twelve months. Don't expect a straight line recovery, there will be zigs and zags along the way, but the overall trend will continue higher. In other recent housing news, the NAHB index, a measure of homebuilder confidence, increased to 47 in December, the highest level since April 2006 and the eighth consecutive monthly gain. In other news from earlier this week, the Empire State index, a measure of manufacturing activity in New York, fell to -8.1 in December from -5.2 in November.
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