Incoming reports on the U.S. housing market continue to improve. For example, privately-owned housing starts in November grew at a seasonally adjusted annual rate of 1.365 million units, according to new Census Bureau data. That was a 3.2 percent increase from October’s upward-revised print and better than anticipated. Strength was seen in both single-family and multi-family (rental) starts last month, with the largest gains found in the southern and western regions of the country. As for building permits, this measure of future construction activity also improved in November, and the single-family component climbed to a new cycle high, the exact opposite of what is typically seen prior to a recession.
Looking ahead, homebuilder confidence surged in December to a 20-year high, according to a new NAHB poll, as the Federal Reserve’s three consecutive rate cuts continued to rejuvenate the housing market. Survey respondents’ opinions of current and future sales conditions improved this month, as did the gauge of prospective buyer traffic. NAHB chief economist Robert Dietz, though, cautioned that “While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability. Higher development costs are hurting affordability and dampening more robust construction growth.”
Sources: Econoday, U.S. DoC, NAHB, FRBSL