December Housing Starts: Capping Off an Extraordinary Year

• December housing starts rose 5.8% from November and 5.2% from a year ago, to 1.669 million, according to the U.S. Census Bureau.
• The 1.709 million permits filed in December were up 4.5% and 17.3%, respectively, from November and December 2019.
• Builders completed 1.417 million homes nationwide in December, up 15.9% from November and 8% from a year ago.

2020 will go down, quite unexpectedly, as one of the best years for home builders in recent memory and proof that great challenges -- and not just those posed by COVID -- can be overcome with hard work and creativity. Demand for homes remains sky high, despite the still-raging pandemic, as people look to take advantage of historically low mortgage rates and find their next home. But just as demand for housing remains red hot, supply-side constraints that have hindered homebuilders for years have recently become even more acute. A shortage of available land and labor and exceptionally volatile materials' prices, which skyrocketed in recent weeks, have combined to hold building activity in check and made it difficult for builders to truly operate at their full capacity and keep up with demand. But even though they may be slightly hobbled, builders are operating smartly -- focusing more on single-family building projects to meet demand, rather than longer-term, more-complicated multifamily development -- and keeping the permit pipeline full, guaranteeing more strong months to come in 2021.