The Mortgage Corner
U.S. homebuilding surged to a 13-year high in December as activity increased across the board, suggesting the housing market recovery was back on track amid low mortgage rates, and could help support the longest economic expansion on record.
Total housing starts increased 16.9 percent in December to a seasonally adjusted annual rate of 1.61 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. This is the highest total since 2006.
The December reading of 1.61 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 11.2 percent to a 1.06 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 29.8 percent to a 553,000 pace.
Total housing starts for 2019 were 1.29 million, a 3.2 percent gain over the 1.25 total from 2018. Single-family starts in 2019 totaled 888,200, up 1.4 percent from the previous year. Multifamily starts in 2019 totaled 401,600, up 7.3 percent from the previous year.
“The solid housing production numbers are in line with strong builder sentiment, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde.
“The year ended on a high note with solid gains in single-family and multifamily production,” said Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President of Forecasting and Analysis. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”
Overall permits, which are a harbinger of future housing production, decreased 3.9 percent to a 1.42-million unit annualized rate in December. Single-family permits decreased 0.5 percent to a 916,000 rate while multifamily permits also fell 9.6 percent to a 500,000 pace.
The lower permit total is why the starts number may come down next month, as it is being viewed as an outlier due to warmer weather in December.
Harlan Green © 2020
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