Housing Starts Rise 3.3%
Housing starts rose 3.3% in November to a seasonally adjusted annual rate of 1.297 million units after a downwardly revised October reading. It was described as a post-recession high. Single-family starts rose 5.3% in November to a seasonally adjusted annual rate of 930,00 after rising by the same percentage in October and were up 8.7% year over year. Multifamily starts fell 1.6% to 367,000 units after rising strongly in October. Regional starts were mixed. Combined single-family and multifamily housing production rose 19.0% in the West and 11.1% in the South. Starts fell 12.9% in the Midwest and 39.6% in the Northeast. An analysis by Wells Fargo states that construction is likely to continue to strengthen in the coming months.
Building Permits Fall 1.4%
Building permits fell 1.4% in November to a seasonally adjusted annual rate of 1.298 million units after rising to 1.297 million units in October. Single-family permits rose 1.4% to 862,000 units after rising to 839,000 units in October. Multifamily permits fell 6.4% to 436,000 units. Regional permit issuance was mixed. Permits rose 1.4% in the South. Permits declined 3.0% in the West, 4.7% in the Midwest and 5.7% in the Northeast.
New-Home Sales Rise 17.5%
Sales of newly built, single-family homes rose 17.5% in November to a seasonally adjusted annual rate of 733,000 units from a downwardly revised October reading. It was the highest sales pace since October 2007. Year-to-date, new home sales are 9.1% above their level over the same period last year. The inventory of new homes for sale was 283,000 in November, which is a 4.6-month supply at the current sales pace. New home sales increased in all four regions. Sales rose 31.1% in the West, 14.9% in the South, 9.5% in the Northeast and 6.9% in the Midwest. 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 5.6%
Total existing-home sales increased 5.6% in November to a seasonally adjusted annual rate of 5.81 million and sales for October were revised up to show an increase of 2.4% instead of the 2.0% gain first reported. It was the strongest pace of sales in nearly 11 years. Sales were 3.8% ahead of a year ago. Single-family home sales rose 4.5% to a seasonally adjusted annual rate of 5.09 million units in November after rising to 4.87 million units in October. Unsold inventory fell to just a 3.4-month supply at the current sales pace, down from a 3.9-month supply in October. The inventory of homes available for sale has fallen for the past 30 months. Regional sales were mixed. Existing home sales jumped 8.3% in the South, 8.4% in the Midwest and 6.7% in the Northeast. Sales fell 2.3% in the West.
Builder Confidence Rises to 74
Builder confidence rose five points to 74 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after the November reading was downwardly revised from 70 to 69. It was the highest level for builder confidence in more than 18 years. All three HMI components registered gains in December. The component measuring buyer traffic jumped eight points to 58, the index gauging current sales conditions rose four points to 81 and the index charting sales expectations in the next six months increased three points to 79. Looking at the three-month moving averages for regional HMI scores, the Midwest climbed six points to 69, the South rose three points to 72, the West increased two points to 79 and Northeast inched up a single point to 54. NAHB Chief Economist Robert Dietz said that with low unemployment, favorable demographic trends and tight inventory, they expect to see builder confidence continue to rise in 2018.
Mortgage Rates Rise to 3.99%
A 30-year fixed-rate mortgage (FRM) rose to 3.99% at the end of December after remaining virtually unchanged in November at 3.92%. At the end of December last year 30-year rates averaged 4.32%. The increase was in response to the increase in long-term interest rates earlier in the month. Nevertheless, mortgage rates remain quite low and affordable.
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