It was a mixed November for new construction with a big drop in building permits, a slight drop in housing starts, and a big jump in housing completions, according to the latest data from the Census Bureau.
Building Permits. Privately‐owned housing units authorized by building permits fell in November to a seasonally adjusted annual rate of 1,342,000, this is a big 11.2% drop from last month and puts permits down 22.4% from the same time last year.
- Economists had projected a much smaller 1.9% drop in November.
Housing Starts. Privately‐owned housing starts in November saw a slight drop to a seasonally adjusted annual rate of 1,427,000, this is down just 0.5% from last month and is now down 16.4% when compared to the same time last year.
- Economists had projected a bigger drop of 1.8% in November.
Housing Completions. Privately‐owned housing completions in November were at a seasonally adjusted annual rate of 1,490,000, this is 10.8% higher than the previous month and is up 6.0% when compared to the same time last year.
All About Multi-Family. If not for multi-family construction this report would have looked very different. Year-over-year single-family permits were down almost 30% and housing starts are down 32%.
- Interestingly completions were actually up more with an almost 10% gain in November.
Southern Majority. Regionally, the South continues to dominate all three categories with 50.7% of housing completions, 55.2% of all housing starts, and 56.2% of permits.
BOTTOM LINE: As homebuilder confidence continues to plunge so will building permits. However, as I mentioned yesterday, builders seem to be arguing we are getting close to the bottom which could mean building permits start their move back up early next year.