Housing Starts Improve in November but Permits Fall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The rate of housing permit filings in November DROPPED 1.4 percent to a seasonally adjusted annual rate (SAAR) of 1.298 million units;
  • The rate of permits for single-family home starts in November INCREASED 1.4 percent to an SAAR of 862,000 units, highest level since August 2007 (916.000)
  • The rate of permits for multi-family homes FELL 6.4 percent in November to 436,000 units (SAAR);
  • The rate of housing starts INCREASED 3,3 percent in November to an SAAR of 1.297 million;
  • Single-family starts ROSE 5.3 percent to an SAAR of 930,000 while multi-family starts DIPPED 1.6 percent to an SAAR of 367,000;
  • The rate of home completions in November FELL 6.1 percent from October with completions for both single-family and multi-family homes decreasing

Image result for home building

Even as builder confidence, according to the National Association of Home Builders, climbed to its highest level since 1999,  permits for new homes slipped in November, according to a report by the Census Bureau and Department of Housing and Development  released Tuesday.

Change since October 2017

  Permits Starts Completions
Total      ↓
Single-Family      ↑
Multi-Family      ↓

 

 

 

 

The report on permits and starts was largely influenced by single family activity as the pace of multi-family permits and starts in November dropped from October. Home building remains precarious in the wake of the new tax bill which removes incentives for homeownership by limiting the deductibility of mortgage interest and property tax payments.

Starts and permits improved in the South, a reflection of building activity following hurricanes Harvey and Irma.

The improvement in residential construction activity came in the same month in which the number of housing construction jobs increased to 2.73 million, the highest level since September 2008. Residential construction jobs have increased in nine of the last 12 months.

According to the report, completions of new homes declined in November, both for single-family and multi-family housing. The decline in single-family completions will exacerbate inventory concerns. According to the most recent government report on new home sales, the months’ supply of new homes for sale dropped in 4.9 in October from 5.2 in September and 5.9 in August.

Completions in October exceeded new home sales by a seasonally adjust annual rate of 103,000, the narrowest margin since March 2015 when completions exceeded sales by 95,000.

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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