Housing Starts Surged In November

Single‐family housing starts in November were at a rate of 1.14 million, the highest level in six months, according to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This represents an 18% increase from the revised October figure of 969,000.

Privately‐owned housing starts in November were at a seasonally adjusted annual rate of 1.56 million, up 14.8% from the revised October estimate of 1.35 million and up 9.3% from the November 2022 rate of 1.42 million.

Single‐family authorizations in November were at a rate of 976,000, a 0.7% uptick from the revised October figure of 969,000. Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1.46 million, which is 2.5% below the revised October rate of 1.49 million but 4.1% above the November 2022 rate of 1.4 million.

Single‐family housing completions in November were at a rate of 960,000, which is 3.2% below the revised October rate of 992,000. Privately‐owned housing completions in November were at a seasonally adjusted annual rate of 1.44 million, up 5% from the revised October estimate of 1.37 million but is 6.2% below the November 2022 rate of 1.54 million.

National Association of Realtors Chief Economist Lawrence Yun welcomed the new data report.

“As homebuilders ramp up production, more supply will reach the market,” he said. “In November, single-family home construction rose 18% from the prior month and was up a hefty 42% from one year ago. Homebuilders’ sales have been up this year despite high mortgage rates due to the offer of incentives on buying down interest rates and the long-held business model of offering co-op commission to buyer agents. That’s the free market way of doing business in a very competitive industry.”

But Yun also warned that “even more homebuilding will be needed with the housing shortage persisting in most markets. Home price appreciation can only moderate from drastically improved supply. Another 30% rise in home construction can easily be absorbed in the marketplace, especially in light of recent weeks’ plunge in mortgage rates.”

“The single-family starts figure is remarkably strong, and we would not be surprised to see this figure revised lower or fall back slightly in the next month, given the nearly 20% rise in November,” said National Association of Home Builders Chief Economist Robert Dietz. “NAHB is forecasting an approximate 4% gain for single-family starts in 2024, as mortgage rates settle lower, economic growth slows and inflation moves lower.”