New Residential Construction
Nov Oct Sep Aug Jul Jun May
Starts 0.555 0.534 0.601 0.614 0.550 0.539 0.588
Single 0.416 0.404 0.402 0.403 0.406 0.421 0.436
Multi 0.114 0.148 0.145 0.168 0.153 0.162 0.138
Permits 0.530 0.552 0.547 0.571 0.559 0.583 0.574
Source: Census Bureau; 2010; annualized, seasonally adjusted.
- Housing starts rose 3.9% in November to 555,000 annualized units from October.
- Single family starts in November were up 7%, while multifamily starts declined 9% from a month earlier.
- Total starts are down 5.9% from a year ago.
- Housing permits dropped 4% in November to 530,000 from October; however, the drop in permits is attributed to a 13.8% drop in multifamily permits; single family permits were up 3 percent.
It’s good to see new residential construction activity pick up towards the end of 2010. But the drop in housing permits is not an encouraging sign for future new residential construction.
Looking forward, homebuilders remain cautious due to a sluggish labor market; housing starts have been lifeless for the past two years, hovering below a 600,000 unit pace since the beginning of 2009. Residential construction is expected to gain only modest traction in 2011 due to less-than robust job gains expected this year and to a disproportionate amount of distressed sales. Foreclosure moratoriums which created robo-signing problems were a short-term fix; when the robo issues are resolved and the moratoriums are lifted, supply will be in excess once again.