Home-building activity rose in a surprise November, with housing starts up 3.3 percent to a rate of 1,297,000, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Single-family housing starts increased 5.3 percent to 930,000. Starts for units in buildings with five units or more came in at 359,000.
Permits, however, decreased, 1.4 percent from October to 1,298,000, according to the data. Single-family permits, still, were up 1.4 percent to 862,000. Permits for units in buildings with five units or more came in at 395,000.
Completions totaled 1,116,000 in November, falling 6.1 percent. Single-family completions decreased 4.6 percent from October to 752,000. Completions for units in buildings with five units or more came in at 353,000.
“A welcoming trend is developing in the housing sector as builders are able to bring more supply to the market on a consistent basis,” said Lawrence Yun, chief economist of the National Association of REALTORS® (NAR), in a statement. “The latest monthly figure of near 1.3 million annualized housing starts is solid, and the growth is mostly coming both in the West and for single-family homes.”
“Single-family permits were up and housing starts reached a 10-year high in November, which points to continued economic strength since beginning of recovery,” said Joseph Kirchner, senior economist for realtor.com®, in a statement. “Conversely, housing completions were down last month, but this is a temporary phenomenon as the increase in permits and starts will lead to more home completions. While we are seeing continued movement in new construction, we still have a long way to go begin to meet the needs of homebuyers, especially in starter homes, where inventory levels have become significantly depleted.”
“There is still more room for improvement, as the latest figure is still not yet at the long-term 50-year average of producing 1.5 million units per year,” Yun said. “If this rising trend continues, the worst of the supply shortage could soon end, which would help slow price appreciation in 2018. That would be a huge, welcoming relief for renters seeking to become homeowners.”
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