November Housing Starts: Rebounding Nicely

• November housing starts totaled 1.679 million (SAAR), up 11.8% from October and 8.3% from November 2020, according to the U.S. Census Bureau.
• Housing permits issued in November were up 3.6% from October and 0.9% from a year ago, to 1.712 million (SAAR).
• 1.282 million (SAAR) homes were completed in November, up 4.1% from October and 3.1% year-over-year.

Housing starts rebounded nicely in November after tumbling in three of the previous four months, recording the largest monthly increase since March and serving as an early indication that homebuilders are beginning to resolve their ongoing construction bottlenecks. Throughout this year, the industry has been buoyed by elevated demand but also pressured by persistent shortages in labor and raw materials. This setting pushed the median price for a new home above $400,000 for the first time ever, with price growth shattering records for the year. But while these conditions also constrained production, those trends appear to be easing and a dam may be breaking. Housing permits in November also notched a decent gain, more proof of enduring builder confidence and a signal that the future construction pipeline remains robust. December’s report may be weakened by the series of destructive storms that ripped through Kentucky and surrounding states. But if the U.S. economy continues to work through its supply chain backlogs as expected, homebuilding in 2022 will rise to levels not reached in nearly fifteen years on the strength of a healthy labor market, low interest rates and favorable demographics.