Steel Markets

Single-Family Housing Starts Hit 10-Year High in November

December 19, 2017

Housing starts surprised economists by jumping 3.3 percent last month to a seasonally adjusted annual rate of 1,297,000. Compared to November 2016, starts were up 12.9 percent. Starts of single-family homes jumped 5.3 percent to 930,000 units, the highest level since September 2007. Construction starts on buildings with five units or more in November inched up less than 1 percent.

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Growth was primarily in the South and West, which grew 11.1 percent and 19.0 percent, respectively. Starts fell 39.6 percent in the Northeast and 12.9 percent in the Midwest.

Building permits were at an annual rate of 1,298,000 in November, 1.4 percent below the October rate but 3.4 percent higher than in November 2016. Single-family authorizations, like starts, reached a 10-year high, moving up 1.4 percent to a seasonally adjusted annual pace of 862,000 units. Authorizations for multi-unit building permits fell 8.8 percent. The South was the only region to have a positive gain in overall permit authorizations, up 1.4 percent for the month. Permits for single-family housing rose in all regions except the West.

Builder confidence in the market for new single-family homes was at an 18-year high in the last survey by the National Association of Home Builders and Wells Fargo. The Housing Market Index rose five points in December to 75.

NAHB said demand for housing is on the rise. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year,” said NAHB Chief Economist Robert Dietz.