Housing: Starts Slip, Permits Rise
According to information released by HUD (Housing and Urban Development) and the U.S. Census Bureau total housing starts dropped by 3 percent in November to 861,000 units, this on a seasonally adjusted annual rate. Data for housing starts include both single-family houses and multifamily homes, such as apartment buildings.
The November figures were down from 888,000 housing starts in October. The Commerce Department had initially anticipated an October pace for starts of 894,00 units but revised those figures downward. The housing start figures for the fist 11 months of this year are 27.1 percent higher as compared to the same 11-month period for 2011.
Single-family home construction fell by 4.1 percent to a seasonally adjusted pace of 565,000 units, while multifamily construction dropped 1 percent to 296,000 units.
In spite of the November decrease, the average rate for housing starts from September through November was the highest for a three-month span since the ending of August 2008. In addition David Crowe, Chief Economist for the NAHB (National Association of Home Builders) says that housing starts for the fourth quarter are “well ahead” of the last quarter and that the industry is on track for a projected 25 percent jump in housing production for 2012 versus the previous year.
Emphasizing the overall positive numbers for this year some analysts are projecting 2013 to be the best year for construction and the general housing market since 2007.
Some related data released by HUD and the Census Bureau shows that permits for new home construction (building permits) increased by 3.6 percent to 899,000 units, again on a seasonally adjusted average. This building permit data reflects the fastest rate of growth since July of 2008.
New home construction permits are a forward looking or “leading” indicator that reflects projected housing activity in the months to come. Indicative of this, industry analysts are expecting continued growth in the housing market through 2013.
Only one region experienced a decline in building permits in November. The Northeast saw a drop in permits of 6.2 percent in November, while the Midwest saw an increase of 8.1 percent with the West raising 5.9 percent followed by the South with an increase of 2.9 percent.
The Labor Department recently released additional data showing that the growing housing market is going hand-in-hand with an increase in job growth in the building industry. According to LD statistics job openings in the construction industry increased by 130,000 this past October, this was up 59 percent from the previous month, and was the highest level since May of 2008.
Robert Dietz of the NAHB says that each new home brings full employment for three people for one year. Confidence among homebuilders has increased for eight straight months says the NAHB.
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