November Housing Starts Rise, but Single-Family Homes Lag

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that new housing starts in November rose to a seasonally adjusted annual rate of 1.256 million, an increase of 3.2% from the downwardly revised October rate of 1.217 million and a decrease of 3.6% compared with the November 2017 rate of 1.303 million.

The revision to the October rate dropped 10,000 new housing starts from the previously reported total. The consensus estimate from a survey of economists expected a November rate of around 1.221 million.

Total housing starts in November were higher than analysts’ consensus, and estimates of combined starts for September and October were also lifted. November starts were the highest in four months.

For the first 11 months of the year, total starts were up 5.1% on a non-seasonally adjusted basis and single-family starts were up 3.9%. Construction of buildings with two to four units is up 14.5%, and on buildings of five or more units, construction is up 7.8%.

Single-family housing starts slipped month over month by 40,000 in November to 824,000. The decrease primarily reflects a month-over-month decline of 58,000 in the West.

The seasonally adjusted rate of new building permits rose to 1.328 million, up 5% from the revised October rate of 1.265 million and 0.4% higher than the November 2017 rate.

Permits for new single-family homes rose month over month in November from a revised annual rate of 847,000 in October to a seasonally adjusted annual rate of 848,000. The rate increased by 0.4% year over year.

Multi-family starts for buildings with five or more units increased by 24.9% year over year in November to 417,000, the third-highest monthly total of the year to date This number is more volatile than the single-family number and has moved mostly sideways since 2013.

In 2017, 1.202 million housing units were started, up 2.4% compared with 2016 and a 10-year high. An estimated 1.263 million permits were issued in 2017, up 4.7% year over year.