October 25, 2016

Single-Family Starts Zoom to 7-Year High

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Single-Family Starts Zoom to 7-Year High

Housing starts for newly constructed single-family homes soared to the highest level in November since January 2008, boosting builders’ confidence as they look to head into 2016.

Read more: Building a Builder Team

The Commerce Department reported that single-family housing production rose 7.6 percent month-over-month in November while multifamily production increased 16.4 percent last month.

“The November gains in both single-and multifamily starts show that the overall market continues to move forward,” says Tom Woods, chairman of the National Association of Home Builders. “As builders anticipate more consumer demand for housing, they should continue to add inventory.”  

The South and West posted the highest gains last month across the country. For combined single- and multifamily starts, the South saw a 21.3 percent month-over-month gain while the West saw starts rise 6.3 percent, the Commerce Department reports. The Midwest held flat while starts in the Northeast dipped 8.5 percent.

Nationwide housing permits – a sign of future production too – also rose last month, climbing 11 percent to 1.289 million units in November. Broken out, multifamily permits rose 26.9 percent to a rate of 566,000 while single-family permits rose 1.1 percent to 723,000 – the highest level since December 2007. The Midwest posted a 22 percent gain in permits, followed by a 21.7 percent increase in the West, and a 5.6 percent increase in permits in the South. The Northeast saw no big fluctuations in permits last month.

"Single-family production this month has reached levels last seen before the Great Recession, an indicator that we are making gradual headway back to a normal housing market," says NAHB Chief Economist David Crowe. "As we close out the year, we can see that the housing sector has made headway in 2015, and we expect the recovery to continue at a modest pace."

Source: National Association of Home Builders