November housing starts and permits reported by Census and HUD were over the one million mark in November. Except for a brief breech of that mark in early spring, home construction has not been over one million since 2008. Single-family starts rose to 727,000, a 20.8% increase over October and the highest since December 2007. Multifamily starts rose to 364,000, a 26.8% increase over October.
Three of the four Census regions also saw significant increases in both total and single-family starts; the Midwest led with a 41.7% increase in total starts to 214,000, the highest since August 2007. The South increased 38.5% to 558,000, the highest since February 2008. The West increased 8.8% to 216,000 and the Northeast fell 29.4% but from a five year high in October.
Permits were also over 1 million for the third month in 2013. The November level was down 3.1% from a peak of 1,039,000 in October, which was a five year high. Single-family permits were up 2.1% to 634,000, the highest since April 2008 and multifamily permits were down 10.8% to 373,000 have reaching a six and a half year high in October.
The bounce back in starts comes as home buyers reenter the market from the uncertainty caused by a spike in mortgage rates and the government shut down and confusion in October. The government release of starts was delayed because of that shutdown so the rise in starts that began in October was not revealed until the December release when starts for September, October and November were first reported.
The November catch-up report bodes well for the year end totals and for leading into 2014. Home prices are rising because of the low inventories of both new and existing homes. Mortgage rates are rising but will remain low by historic standards. Employment is increasing more consistently providing added confidence to leery home buyers that the economic recovery will continue. The US Congress appears to have solved at least one of the lingering issues that caused a pause in the markets in October. As uncertainties diminish, housing conditions continue to improve and pent-up demand remains high, the housing market will continue to improve albeit at a modest pace.
Posted by David Crowe – NAHB Eye on Housing