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Double-Digit Hike in December Housing Starts

Fueled by Surge in Multifamily Construction


Single-family starts dropped a bit in December month-over-month, but the National Association of Home Builders said the sector was up nine percent in 2016, compared to 2015, and that the industry should continue to grow steadily this year.

Combined housing starts, at an adjusted annual rate of 1.22 million units, jumped 11.3 percent in December over November, according to the Census Bureau, mainly on the strength of the multifamily sector, which rocketed higher by 53.9 percent for the month, and has increased 10.3 percent compared to December 2015.

Total starts are up 5.7 percent compared to December 2015, and grew 4.9 percent in 2016 versus 2015, or year-to-year.

Single-family starts fell 4.0 percent on a monthly basis, but are 3.9 percent higher compared to December 2015, and are also up 9.3 percent versus 2015.

"Despite the slight dip in single-family production, December's rate is still the fourth highest single-family pace since the Great Recession, and single-family starts also posted solid gains for the year," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB). "Builders remain confident and we expect further growth in the single-family market in the year ahead."

Combined building permits in December were at an adjusted annual rate of 1.210 million. This is 0.2 percent lower than November, but 0.7 percent above December 2015, and up 0.4 percent year-to-year.

Single-family permits were 4.7 percent higher month-over-month, 10.7 percent higher from December 2015, and are up 7.1 percent year-to-year. Multifamily permits dropped 10.1 percent for the month, have declined 17.1 percent versus December 2015, and are also down 10.4 percent year-to-year.

Housing completions in December were at a seasonally adjusted annual rate of 1.123 million. This is 7.9 percent below November, but 8.7 percent higher versus December 2015. It is also up 8.7 percent year-to-year.

Single-family housing completions dropped 0.9 percent month-over-month, but have increased 7.5 percent from December 2015, and are also up 13.9 percent year-to-year.

Multifamily declined 19.3 percent versus November, but this sector is up 12.3 percent compared to the December 2015, and has also increased 1.2 percent year-to-year.

"This report represents firm growth for housing in 2016, as single-family starts rose nine percent and multifamily production was down slightly," said Robert Dietz, chief economist for the NAHB. "We expect that 2017 will be another year of gradual, steady improvement in the housing market. Multifamily starts have been volatile in recent months, but should level off as supply meets demand. Meanwhile, single-family production continues to gain momentum but is limited by supply-side headwinds."

The Census Bureau's residential construction report for January 2017 will be released Feb. 16.

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July 16, 2019, 12:19 pm PDT

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