Housing Starts Hit 13-year High in December

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homebuilding activity, measured by housing starts ROSE sharply in December hitting the highest level in 13 years,
  • The seasonally adjusted annual rate of total starts ROSE 16.9 percent or 233,000 to1.61 million;
  • Starts for new single-family homes ROSE 11.2 percent or 106,000 to 1.05 million;
  • The rate of total housing permits FELL 58,000 or 3.9 percent in December to 1.42 million;
  • The pace of single-family permits fell 5,000 or 0.5 percent to 916.000;
  • The SAAR of all housing completions ROSE 62,000 or 5.1 percent to 1.28 million while the pace of new single-family completions ROSE 6,000 or 0.7 percent to 912,000.

Trends:

  • The month-month increase in total housing starts was the largest since October 2016;
  • Single-family starts rose to the highest level since June 2007;
  • Single-family housing starts were up year-year for the seventh straight month.

 Data Source: Census Bureau and Department of Housing and Urban Development

Image result for housing starts

Single-family homebuilding moved higher again in December, reinforcing solid builder confidence levels according to the Census Bureau and Department of Housing and Urban Development.

The HUD-Census report showed housing activity reaching new post-recession highs, suggesting a comeback for housing. The home-building data supports strong builder confidence as suggested by the National Home Builders Association’s housing market index. That index slipped one point in January but remains at a solid 75 the NAHB reported Thursday.

Even with the month-month decline in housing permits, single-family permits accounted for 64.7 percent of all permits, up from 62.5 percent in November. For the year, single-family permits represented 63.0 percent of all permits, down from 64.6 percent in 2017 and 2018.

Single-family starts represented 69.0 percent of all starts in 2019, down from 69.9 percent in 2018 and 70.5 percent in 2017.

The downward trend of single-family home building suggests builders are becoming more prudent and more closely matching construction to sales trends. New home sales represented 80.9 percent of starts in the first 11 months of 2019 compared with 73.5 percent in 2017-18.

The report on December 2019 new home sales is scheduled for release on Jan 27.

Builder confidence, as reflected in the National Association of Home Builders’ Housing Market Index, showed a slight slippage in the outlook for current sales of new single-family homes in its January reading though the “buyer traffic” component of the index rose in January.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

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