Housing & Construction December 2017
Housing Starts Rise 13.7%
Housing starts rose 13.7% in October to a seasonally adjusted annual rate of 1.29 million units after a slight upward revision to September’s numbers. It was the highest housing production reading since October 2016. Single-family starts rose 5.3% in October to a seasonally adjusted annual rate of 877,000 and were up 8.4% since January. Multifamily starts jumped 36.8% to 413,000 units after falling in September. Regional starts were mixed. Combined single-family and multifamily housing production rose 42.2% in the Northeast, 18.4% in the Midwest and 17.2% in the South. Starts fell 3.7% in the West.
Building Permits Rise 5.9%
Building permits rose 5.9% in October to a seasonally adjusted annual rate of 1.297 million units after falling to 1.22 million in September. Single-family permits rose 1.9% to 839,000 units after rising to 819,000 units in September while multifamily permits fell for the second consecutive month, dropping 9.5% to 458,000 units. Permits rose in all four regions. They increased 13.0% in the West, 4.1% in the Northeast, 3.8% in the Midwest and 3.0% in the South.
New-Home Sales Rise 6.2%
Sales of newly built, single-family homes rose 6.2% in October to a seasonally adjusted annual rate of 685,000 units from a downwardly revised September reading. It was the highest sales pace since October 2007. Year-to-date, new home sales are 8.9% above their level over the same period last year. There was strong growth at entry-level price points in markets where builders are able to meet the demand. The inventory of new homes for sale was 282,000 in October, which is a 4.9-month supply at the current sales pace. New home sales rose in all four regions. Sales rose 30.2% in the Northeast, 17.9% in the Midwest, 6.4% in the West and 1.3% in the South. Sales of new homes are tabulated when contracts are signed and are considered a more timely barometer of the housing market than purchases of previously-owned homes, which are calculated when a contract closes.
Existing Home Sales Rise 2.0%
Total existing-home sales increased 2.0% in October to a seasonally adjusted annual rate of 5.48 million from a downwardly revised 0.4% increase to 5.37 million in September. Sales were 0.9% below a year ago. Single-family home sales rose 2.1% to a seasonally adjusted annual rate of 4.87 million in October from 4.77 million in September, but are still 1.0% under the 4.92 million pace a year ago. The National Association of Realtors says that sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping prices high. Lagging sales in Florida and Texas post-hurricanes are also impacting overall numbers. Total housing inventory at the end of October dropped 3.2% to 1.80 million existing homes available for sale, 10.4% lower than a year ago and has fallen year over year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.4 months a year ago. Sales rose in all regions, with existing home sales in the Northeast climbing 4.2%, sales in the Midwest rising 0.8%, sales in the South increasing 1.9% and sales in the West growing 2.4%.
Builder Confidence Rises to 70
Builder confidence rose two points to 70 in November, the highest reading since March of this year and the second highest on record since July 2005, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Two out of the three HMI components registered gains in November. The component gauging current sales conditions rose two points to 77 and the index measuring buyer traffic increased two points to 50. Meanwhile, the index charting sales expectations in the next six months dropped a single point to 77. Looking at the three-month moving averages for regional HMI scores, the Northeast jumped five points to 54 and the South rose one point to 69. Both the West and Midwest remained unchanged at 77 and 63, respectively.
Mortgage Rates Steady
A 30-year fixed-rate mortgage (FRM) remained virtually unchanged at the end of November at 3.92% after rising slightly to 3.94% at the end of October. At the end of November last year 30-year rates averaged 4.03%.
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