Production of new single-family homes and apartments rose 9.3 percent to a seasonally adjusted annual rate of 685,000 units in November, according to figures released by the U.S. Commerce Department today. This marks the fastest pace of housing starts since October of 2008.
The 9.3 percent gain in combined starts resulted from improvements in both the single- and multifamily sectors in November. Single-family starts posted a 2.3 percent gain to a 447,000-unit pace, which was their fastest rate since June of 2011. Meanwhile, the more volatile multifamily side surged 25.3 percent to a 238,000-unit pace -- the fastest since September 2008.
“While we still have a long way to go back to normal, the latest numbers are one more indication that housing is slowly turning the corner,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “In scattered markets across the country, buyers who have long sat on the sidelines are starting to take advantage of today’s very attractive prices and interest rates, while others are making the move to a new apartment. This nascent trend would be stronger if not for the very restrictive lending environment that continues for both building and buying new homes.”
“Along with recent gains that have been registered in builder confidence and other economic measures, the improvement in new-home production and permitting shown in this latest report provides further evidence of the gradual strengthening that we expected to see in housing markets toward the end of the year,” said NAHB Chief Economist David Crowe. “We anticipate continued, slow improvement in housing starts and sales through 2012.”
Combined housing starts were up in three out of four regions in November, with the Northeast posting the biggest gain of 53.8 percent, the West posting a 22.6 percent increase and the South registering a 4.1 percent gain. The Midwest was the exception to the rule, with an 18.2 percent decline.
Permit issuance, which can be an indicator of future building activity, rose 5.7 percent to a seasonally adjusted annual rate of 681,000 units in November – the best pace since March of 2010. Single-family permits rose 1.6 percent to 435,000 units while multifamily permits rose 13.9 percent to 246,000 units, which was their strongest pace since October of 2008.
Regionally, combined single- and multifamily permits gained 32.8 percent in the Northeast and 21.4 percent in the West, but declined 1.9 percent in the Midwest and 2.6 percent in the South in November.