U.S. housing starts and permits for November exceeded expectations

Washington, D.C. — The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the new residential construction statistics for November 2017.

Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,298,000. This is 1.4 percent (±1.7 percent) below the revised October rate of 1,316,000, but is 3.4 percent (±2.3 percent) above the November 2016 rate of 1,255,000. Single-family authorizations in November were at a rate of 862,000; this is 1.4 percent (±1.6 percent) above the revised October figure of 850,000. Authorizations of units in buildings with five units or more were at a rate of 395,000 in November.

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,297,000. This is 3.3 percent (±9.1 percent) above the revised October estimate of 1,256,000 and is 12.9 percent (±11.7 percent) above the November 2016 rate of 1,149,000. Single-family housing starts in November were at a rate of 930,000; this is 5.3 percent (±10.2 percent) above the revised October figure of 883,000. The November rate for units in buildings with five units or more was 359,000.

Privately-owned housing completions in November were at a seasonally adjusted annual rate of 1,116,000. This is 6.1 percent (±10.4 percent) below the revised October estimate of 1,189,000 and is 7.2 percent (±12.5 percent) below the November 2016 rate of 1,203,000. Single-family housing completions in November were at a rate of 752,000; this is 4.6 percent (±12.0 percent) below the revised October rate of 788,000. The November rate for units in buildings with five units or more was 353,000.

According to Scott Volling, principal, PwC, “housing starts and permits for November both exceeded consensus estimates, boosted by the highest number of single family starts since September of 2007. This is a positive sign as it shows builders continuing to shift focus to the pent-up demand in the single-family segment, which should benefit consumers as more inventory enters a tight market. With the impacts from hurricanes Harvey and Irma now largely in the rearview mirror for builders, this is the second straight month of strength in both starts and permits and a trend we expect to continue into what may be the strongest spring selling season since before the recession.

“Total November starts of 1,297,000 — the highest in over a year — beat consensus estimates of 1,250,000 by 3.8 percent and was 12.9 percent higher than November 2016,” Volling said. “Single family starts of 930,000 rose 3.3 percent over last month and 12.9 percent compared to last year. While permits dropped 1.4 percent from October, to 1,298,000, this is still a very positive result as the October number was revised upward to 1,316,000, the highest since June 2015. The volatile multi-family segment came in at 359,000, 10 percent higher than last year and essentially flat compared to the revised October number.

“Today’s positive housing starts report follows yesterday’s release of the monthly home builder sentiment index, reaching the highest level since 1999, with a significant gain in the foot traffic component of the metric driving much of the gain. This is reflective of the limited supply of existing homes for sale on the market, which continues to drive home buyers to new home communities,” Volling said. “Importantly, the rise in builder sentiment comes at a time when the new tax bill was taking shape. After some early concerns expressed by builders and realtors about the removal of key measures supporting the industry, both groups appear optimistic about provisions that retain aspects of the mortgage interest deduction and property tax deduction, in addition to other components of the bill that are expected to benefit businesses as a whole.