Housing Starts Finish 2019 Strong
Total housing starts increased 16.9% in December to a seasonally adjusted annual rate of 1.61 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. This is a 13-year high for housing starts.
The December reading of 1.61 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 11.2% to a 1.06 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 29.8% to a 553,000 pace.
Total housing starts for 2019 were 1.29 million, a 3.2% gain over the 1.25 total from 2018. Single-family starts in 2019 totaled 888,200, up 1.4% from the previous year. Multifamily starts in 2019 totaled 401,600, up 7.3% from the previous year.
“The solid housing production numbers are in line with strong builder sentiment, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde.
“The year ended on a high note with solid gains in single-family and multifamily production,” said Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President of Forecasting and Analysis. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”
On a regional and year-to-date basis, combined single-family and multifamily starts in December are 3% higher in the Northeast and 8.6% higher in the South. Starts are down 0.8% in the Midwest and 4.7% in the West.
Overall permits, which are a harbinger of future housing production, decreased 3.9% to a 1.42 million unit annualized rate in December. Single-family permits decreased 0.5% to a 916,000 rate while multifamily permits also fell 9.6% to a 500,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 13.4% higher in the Northeast, 0.1% higher in the Midwest, 5.1% in the South and 0.1% higher in the West.