November Housing Starts: Broadening the Scope

• November housing starts were up 1.2% from October and 12.8% from a year ago, to 1.547 million (SAAR), according to the U.S. Census Bureau.
• Housing permits rose 6.2% month-over-month and 8.5% year-over-year in November, to 1.639 million (SAAR).
• Newly completed homes fell 12.1% from October and 4.8% from a year ago.

Accelerated growth rates in home construction figures in November showcase the enduring strength of the housing and homebuilding markets and indicate that builders are overcoming the constraints that have limited activity in recent months. Homebuilder optimism sat at a record high in November and has stepped back only slightly since, and after falling behind for a couple of months, it appears that activity is keeping up with this elevated optimism. More permits were issued in November than in any month since 2006, and after steadily declining through the fall, the multifamily sector in particular experienced significant gains on the month, which suggests that builders are broadening the scope of projects that they are taking on. A double-digit percent pullback in new homes completed may highlight the limitations which have hindered the industry of late – including a lack of available land, materials and labor – but there’s no denying that this is another strong report for the housing market as the end of the year approaches. After two monthly declines in the past three releases, a strong increase in permits indicates builders are breaking free from these restrictions and appear prepared for increased activity in the months ahead.