RISMEDIA, December 18, 2010—Nationwide housing starts rose 3.9% in November 2010 to a seasonally adjusted annual rate of 555,000 units from an upwardly revised number in the previous month, according to newly released data from the U.S. Commerce Department. This marked the first upward movement in new-home production since August, and was entirely attributable to a nearly 7% gain in single-family home building.
“Builders are very cautiously adding to their diminished inventories in preparation for the spring buying season and an anticipated modest revival in buyer demand when the economy shows more signs of improvement,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Michigan. “That said, we are still looking at a very low level of housing production, due largely to builders’ inability to obtain construction financing.”
“The modest increase in single-family starts and permits in November is consistent with a very low inventory of unsold new homes and our member surveys that have shown a degree of optimism among builders with regard to sales expectations in the next six months,” said NAHB Chief Economist David Crowe. “However, builders continue to find it extremely difficult to obtain credit for acquisition, development and construction activities, and this is weighing on their ability to initiate viable new projects that could generate much-needed job growth.”
The 3.9% gain in overall housing starts this November was due entirely to a 6.9% increase to a 465,000 unit seasonally adjusted annual rate of new-home production on the single-family side. Meanwhile, multifamily housing starts declined 9.1% to a 90,000-unit rate.
Regionally, starts activity showed gains in all but one part of the country in November. The Midwest, South and West each posted gains, of 15.8%, 2.3% and 2.1%, respectively, while the Northeast posted a 2.5% decline.
Permit issuance, which can be an indicator of future building activity, declined 4% to a seasonally adjusted annual rate of 530,000 units in November, its lowest level since April 2009. However, this decline was entirely due to a 23% drop-off in the more volatile multifamily sector, where permits hit a seasonally adjusted annual rate of just 114,000 units. In contrast, single-family permits rose 3% to a rate of 416,000 units—their highest level since this June.
Regionally, permit activity was mixed in November, with the Northeast and Midwest registering declines of 8.3% and 22.2%, respectively, and the South and West posting gains of 1.9% and 2.7%, respectively.
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