Multifamily surge drives December housing starts

The Scotsman Guide - Victor Whitman - 19 January 2017

A surge in multifamily construction pushed up December’s housing starts to the second highest level of the year.

Overall starts were at a seasonally adjusted rate annual rate of 1.2 million, up 11 percent from the November level and 5.7 percent year over year, the U.S. Census Bureau. Over the past 12 months, the reading was only higher in October (1.3 million).

Single-family starts totaled 795,000, down 4 percent from November’s level, but ahead by nearly 4 percent compared to the December 2005 level.  Despite the monthly dip, the National Association of Home Builders (NAHB) said that this was the fourth highest reading for single-family starts since the Recession.

“Builders remain confident and we expect further growth in the single-family market in the year ahead,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas.

Meanwhile, multifamily starts rose to 417,000, up 54 percent from November and 10 percent year over year. The reading on multifamily has been volatile in recent months, however.

Lawrence Yun, chief economist for the National Association of Realtors, said that starts are still lagging.

“Ideally, housing starts should be in the range of 1.5 to 1.6 million,” Yun said. “Good news today on trend, but still far from the goal.”