Housing Starts Miss, Building Permits Beat Forecast for December

New Residential Construction Report Lags Builder Confidence Boost

The U.S. Census Bureau said housing starts fell short of the forecast for December, while building permits beat expectations. The new residential construction report covers a period that lags a boost in builder confidence in February.

Building Permits

Building permits in December came in at a seasonally adjusted annual rate of 1,326,000, or 0.3% (±1.2%) higher than the revised November rate of 1,322,000 and is 0.5% (±1.1%) above the December 2017 rate of 1,320,000.

The consensus forecast was 1,290,000, with forecasts ranging from a low of 1,230,000 to a high of 1,305,000.

Single‐family authorizations in December were at a rate of 829,000; this is 2.2% (±0.7%) below the revised November figure of 848,000.

Authorizations of units in buildings with five units or more were at a rate of 460,000 in December. An estimated 1,310,700 housing units were authorized by building permits in 2018.

This is 2.2% (±0.6%) above the 2017 figure of 1,282,000.

Housing Starts

Housing starts in December came in at a seasonally adjusted annual rate of 1,078,000, which is 11.2% (±14.0%) below the revised November estimate of 1,214,000 and 10.9% (±16.1%) below the December 2017 rate of 1,210,000.

The consensus forecast was 1,260,000, with forecasts ranging from a low of 1,200,000 to a high of 1,290,000.

Single‐family housing starts in December were at a rate of 758,000; this is 6.7% (±15.3%) below the revised November figure of 812,000.

The December rate for units in buildings with five units or more was 302,000. An estimated 1,246,600 housing units were started in 2018. This is 3.6% (±2.1%) above the 2017 figure of 1,203,000.

Housing Completions

Housing completions in December came in at a seasonally adjusted annual rate of 1,097,000, or 2.7% (±10.0%) below the revised November estimate of 1,128,000 and 8.4% (±12.2%) below the December 2017 rate of 1,197,000.

Single‐family housing completions in December were at a rate of 790,000; this is 0.1% (±14.0%) above the revised November rate of 789,000. The December rate for units in buildings with five units or more was 296,000.

An estimated 1,191,700 housing units were completed in 2018. This is 3.4% (±3.8%) above the 2017 figure of 1,152,900.

Builder Confidence

Meanwhile, the NAHB//Wells Fargo Housing Market Index (HMI) found builder confidence rose 3 points to 62 for February, beating the consensus forecast.

The National Association of Homebuilders said it is the second consecutive month in which all the HMI indices posted gains.

Look for revisions to this very volatile report in the next month’s release, as well as the result of increased optimism.