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US housing starts finish 2019 strong: NAHB

Total housing starts increased 16.9 per cent in December to a seasonally adjusted annual rate of 1.61 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. This is a 13-year high for housing starts.

The December reading of 1.61 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 11.2 percent to a 1.06 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 29.8 percent to a 553,000 pace.

Total housing starts for 2019 were 1.29 million, a 3.2 per cent gain over the 1.25 total from 2018. Single-family starts in 2019 totalled 888,200, up 1.4 per cent from the previous year. Multifamily starts in 2019 totalled 401,600, up 7.3 per cent from the previous year.

“The solid housing production numbers are in line with strong builder sentiment, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.

“The year ended on a high note with solid gains in single-family and multifamily production,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice-president of forecasting and analysis. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”

On a regional and year-to-date basis, combined single-family and multifamily starts in December are 3.0 per cent higher in the Northeast and 8.6 per cent higher in the South. Starts are down 0.8 per cent in the Midwest and 4.7 per cent in the West.

Overall permits, which are a harbinger of future housing production, decreased 3.9 per cent to a 1.42 million unit annualized rate in December. Single-family permits decreased 0.5 per cent to a 916,000 rate while multifamily permits also fell 9.6 per cent to a 500,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 13.4 per cent higher in the Northeast, 0.1 per cent higher in the Midwest, 5.1 per cent higher in the South and 0.1 per cent higher in the West.