• Building permits issued in November increased to 1,505,000 (SAAR). That’s 6.1% above the revised October rate but still 0.2% lower than a year ago.
• Housing starts increased to 1,289,000 (SAAR) in November, down 1.8% from the revised October estimate and 14.6% lower than a year ago, according to the U.S. Census Bureau. 
• Single-family housing starts increased to 1,011,000 (SAAR) in November, up 6.4% from the October estimate but 10.2% below last November.

What happened: Single-family housing starts rebounded in November but perhaps not enough to make up for the October drop that was partly due to the hurricanes that hit the Southeast region. Rising housing inventory coupled with higher uncertainty about the future path of mortgage rates is causing builders to proceed with caution. Multifamily starts continued to fall, raising concerns about a large decline in supply in the year ahead.

Why this matters: The recent inflation uptick coupled with stronger than expected economic growth have caused traders to reassess their forecasts for Federal Reserve interest rate cuts in 2025. 

On one hand, a strong economy bodes well for homebuying activity. On the other hand, it means interest rates could remain elevated. 

Despite the relatively higher interest rate environment, builders expect home sales to rise in the year ahead according to the National Association of Home Builders.