New Residential Construction in November Stronger than Expected

The New Residential Construction report released by the U.S. Census Bureau shows housing starts and building permits continued to post unusual strength in November. The report is the latest indication the housing market, particularly the new home market, is getting very strong.

Building Permits

Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,298,000, beating the 1,240,000 consensus forecast. While that is 1.4% (±1.7%)* below the revised October rate of 1,316,000, it is 3.4% (±2.3%) higher than the November 2016 rate of 1,255,000.

Single-family authorizations in November were at a rate of 862,000, which is 1.4% (±1.6%)* higher than the revised October figure of 850,000. Authorizations of units in buildings with five units or more were at a rate of 395,000 in November.

Housing Starts

Privately-owned housing starts in November came in at a seasonally adjusted annual rate of 1,297,000, beating the 1,270,000 consensus forecast. That is 3.3% (±9.1%)* higher than the revised October estimate of 1,256,000 and a whopping 12.9% (±11.7 percent) higher than the November 2016 rate of 1,149,000.

Single-family housing starts in November were at a rate of 930,000; this is 5.3% (±10.2%)* above the revised October figure of 883,000. The November rate for units in buildings with five units or more was 359,000.

Housing Completions

Privately-owned housing completions in November were at a seasonally adjusted annual rate of 1,116,000. This is 6.1% (±10.4%)* below the revised October estimate of 1,189,000 and is 7.2% (±12.5%)* below the November 2016 rate of 1,203,000.

Single-family housing completions in November were at a rate of 752,000; this is 4.6% (±12.0%)* below the revised October rate of 788,000. The November rate for units in buildings with five units or more was 353,000.

Housing Market Strength

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) soared to the highest level since July 1999 in December. Builder confidence in the market for newly-built single-family homes rose 5 points to 74 in December, the highest homebuilder sentiment has been in more than 18 years.

“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

The New Residential Construction report by the U.S. Census Bureau showed housing starts and building permits also posted extremely strong gains in October.