Single-Family Sector Boosts Housing Production in 2017
While the December numbers show a return to trend after an especially strong November report, 2017 saw significant gains in housing production overall.
Nationwide housing starts fell 8.2% in December to a seasonally adjusted annual rate of 1.19 million units after an upwardly revised November reading, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. While the December numbers show a return to trend after an especially strong November report, 2017 saw significant gains in housing production overall. Starts rose 2.4% last year, pushed up by an 8.5% jump in the single-family sector. Multi-family starts dropped 9.8%.
Looking at the December 2017 report, single-family starts fell 11.8% to a seasonally adjusted annual rate of 836,000 units. However, the three-month moving average for single-family production reached a post-recession high. Meanwhile, multi-family starts ticked up 1.4% to 356,000 units.
“There is a pro-business sentiment in Washington right now, and our builders hope to continue receiving relief from overly burdensome regulations,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. “This political climate is boosting their optimism in the housing market.”
“A return to normal levels of housing production this month is expected after a very strong fall season,” said Robert Dietz, NAHB’s chief economist. “We saw a surge of housing activity in the South after hurricane-related delays, and now that region is returning to its positive growth trend.”
NAHB is forecasting continued growth in housing production this year, led by ongoing single-family gains. Total housing starts are expected to grow 2.7% to 1.25 million units. Single-family production should increase 5% to 893,000 units, while the multi-family sector is expected to edge 1.6% lower this year to 354,000. Regionally in December, combined single- and multi-family housing production fell 0.9% in the West, 2.2% in the Midwest, 4.3% in the Northeast and 14.2% in the South.
Overall permit issuance in December was essentially flat, inching down 0.1% to a seasonally adjusted annual rate of 1.302 million units. Single-family permits rose 1.8% to 881,000 units, while multi-family permits fell 3.9% to 421,000. Permits rose 43% in the Northeast, 8.7% in the Midwest and 1.7% in the West. Permits declined 11.1% in the South, led by a drop on the multi-family front.