Housing starts were up last month and it appears that increased construction could be on the horizon for 2020.
Housing starts grew 3.2% in November to a seasonally adjusted annual rate of 1.365 million and the pace for October was revised upward, according to the Department of Housing and Urban Development and the Department of Commerce.
Despite October’s increase, Lawrence Yun, the National Association of Realtor’s chief economist, warns homebuilders still need to construct more homes in order to meet long term demand.
“The latest housing starts numbers are good and rising, but still short by 135,000 compared to the long-term average — and well short of the 5 to 6 million that is now needed to fully end the housing shortage,” Yun said.
However, yesterday’s Housing Market Index, which revealed that homebuilder confidence reached a 10-year high, indicates more home construction could be on the horizon.
“More home construction appears to be on the way as we move into 2020, as reflected in the very high confidence of home builders,” Yun said. “They are clearly recognizing an improved business opportunity.”
During the month, single-family starts grew 2.4% from last month to 938,000 units while multifamily starts grew 2.3% to 404,000 units, according to the report.
Single-family completions decreased 3.6% to a rate of 883,000, while multifamily completions fell 16% to 295,000.
Overall, permits rose to a 12 -1/2 year high, rising 1.4% in November to a seasonally adjusted annual rate of 1.482 million, which is 11.1% above the November 2018 rate of 1.334 million. Single-family permits increased 0.8% to 918,000 and multifamily permits grew 4.4% to 524,000.
“The robust growth in home construction highlighted in the November data is quite welcome, said Mike Fratantoni, the Mortgage Bankers Association’s chief economist.
“For the last few years, the lack of inventory has constrained the pace of home sales and increased the rate of home-price growth, leading to affordability challenges across the country,” Fratantoni said. “November’s strong monthly and annual gains indicate that potential homebuyers next year will have more properties to choose from.”
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