Led by a solid increase in both single-family and multifamily starts, nationwide housing production rose 22.7 percent to a seasonally adjusted annual rate of 1.09 million in November, according to figures released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
“This report is in line with our latest survey, which shows that builders are increasingly confident that buyers who have sat on the sidelines are feeling more secure about their economic situation and are now moving to purchase new homes,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “This upward trend could be even stronger if not for persistently tight lending conditions for buyers and builders facing rising costs for building materials, lots and labor.”
“Single-family and multifamily starts are at five-year highs, providing additional evidence that the recovery is here to stay,” said NAHB Chief Economist David Crowe. “We hit a soft spot this fall when interest rates jumped and the government closed down, but mortgage rates still remain very affordable and pent-up demand is helping to boost the housing market. We expect a continued steady, gradual growth in starts and home sales in 2014.”
Single-family starts posted a 20.8 percent gain to a seasonally adjusted annual rate of 727,000 units in November, which was their fastest rate since December of 2007. Multifamily production was up 26 percent to 364,000 units. Regionally, combined starts activity rose 41.7 percent in the Midwest, 38.5 percent in the South and 8.8 percent in the West, but fell 29.4 percent in the Northeast.
Overall building permits, which are an indicator of future building activity, fell 3.1 percent to 1.007 million units in November. Despite the modest decline, this was the second month that new permit issuance topped the million mark.
Regionally, total permit issuance increased 7.8 percent in the Northeast and fell 7 percent in the South, 0.4 percent in the West and 0.6 percent in the Midwest.