November US Housing Starts and Permits Make Double-Digit Jumps

Both housing starts and permits issued jumped up by double-digit percentages in November, according to estimates reported by the U.S. Census Bureau and HUD.

November starts rebounded from a low October level, the estimated seasonally adjusted annual rate exceeding half of the other monthly levels reported in 2015. The average of September, October and November rates was nearly 11% greater than the average for the same months in 2014.

Single-family starts were up 7.6% to 768,000, their highest level since January 2008. Single-family starts have averaged a 741,000-unit annual rate over the past three months, which is 8.3% greater than the same three months in 2014. Every region except the Midwest experienced a rise in single-family starts.

Permits peaked at their highest level since August 2007 at a seasonally adjusted annual rate of 1,289,000, which was up 11% from the upwardly revised October estimate. Single-family permits rose modestly, but enough to also set an eight-year record of 723,000. Single-family permits rose in every region except the South, which was still the second highest of the year.

Multifamily starts rose 16.4% offsetting a 25% drop in October to a 405,000-unit annual rate and very near the average so far this year of 396,000. Multifamily permits leaped to 566,000, a 26.9% gain, well above the year-to-date average of 481,000.

November levels for starts and permits reflect builders’ steady expectations for continued modest growth in housing demand for both apartment rentals and single-family owned homes. Younger, newly formed households are headed for apartment rentals in record numbers as the millennial generation begins to move out of their parents’ homes and into their own living arrangement. Current homeowners who have delayed moving because of economic reasons are finally taking advantage of low mortgage rates and affordable home prices to make the move they postponed. Neither movement is expected to be dramatic but rather a small speed up in the trends that have been developing over the past two years as the economy cures, employment grows and consumer confidence returns.