Solid Housing Starts Report for November

Data for housing construction activity in November indicated ongoing high levels of activity as builder confidence remains positive.

According to the data from the Census Bureau and HUD, the pace of total November housing starts was down slightly (1.6%) from an upwardly revised October number. The October housing starts estimate was revised up from the initial reading of 1.009 million units (on a seasonally adjusted annual pace) to 1.045 million, with increases for both single-family and multifamily construction.

For November, the rate of single-family construction starts came in at 677,000, down 5.4% from the elevated October reading (716,000).

Multifamily starts of properties with five or more units increased 7.6% to a 340,000 rate in November. The starts rate for 5+ unit construction has been in an approximate stable range of 300,000 to 350,000 since August.

The pace of total starts was up in three of the four Census regions. Single-family starts were down noticeably in the South, after a jump in October.

Housing Starts_Nov_3moMA_v2

On a three-month moving average basis (graphed above) the November report is consistent with positive builder confidence, as reported by the NAHB / Wells Fargo Housing Market Index, and confirms that housing construction is experiencing solid but gradual gains.

For November, single-family starts, on a three-month moving average basis, stand at 685,000, which is a post-recession high. Total housing starts, on a three-month moving average basis came in at 1.034 million – also a post-recession high. The moving average for total housing starts has now been above a one million annual rate for three consecutive months.

Homes under construction_Nov

Another metric consistent with the ongoing recovery in housing, including its economic impact, is the count of housing units under construction. For November, the number of single-family units under construction (on a seasonally adjusted basis) was 364,000, while the count for multifamily was 450,000 according to the Census/HUD estimates. At the start of 2014, the single-family count was 336,000 homes.

Despite the headline monthly declines, the November data suggest the housing recovery is continuing. Year-to-date, single-family starts are up 4.4% compared to this time in 2013. Total starts are up 8.2% year-to-date. NAHB expects strong growth in single-family construction in 2015 as the market continues to expand to more historical levels of production to meet rising demand.

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