WASHINGTON (12/19/13)--The housing supply expanded significantly in November, according to data released Wednesday by the Department of Commerce.
Housing starts were up to a seasonally adjusted annualized rate of 1.09 million last month--an increase of 22.7% and the greatest expansion of construction since early 2008 (MarketWatch Dec. 18)
A key indicator of future construction didn't appear quite as strong. There were 1.007 million new permits issued on an annualized basis, a decline of 3.1% from October and an increase of 7.9% from November 2012. But permits for one-unit dwellings--the most stable and largest data component--were up by 2.1% for the month and 10.5% on an annual basis. The annualized growth rate last month, at 634,000, was the highest it's been since April 2008, according to MarketWatch.
Analysts for the newswire, which had predicted 936,000 housing starts, said that rapid construction could reverse the recent rise in home prices, but noted that home-construction data can be volatile and subject to revisions.
Total completions in November fell to an annualized rate of 823,000, down from 824,000 in October, but up on an annual basis by 21.6% (Economy.com Dec. 18)
Moody's analysts said that the emerging two-year federal budget agreement, relative consistency in monetary policy and a recovering job market could improve the market outlook compared to several months ago--particularly with increasing home values indicating robust demand, despite rising interest rates.
A report released Tuesday by the National Association of Homebuilders showed builders of single family homes expressing greater confidence in the economy this month, in spite of weak mortgage market activity (Market News Dec. 18).
Commerce Department data showed housing starts were up on an annual basis in all four census regions, but down in the Northeast on a monthly basis, by 29.4%. The Midwest, South, and West saw monthly gains of 41.7%, 38.5% and 8.8%, respectively.
The department also released data whose publication was delayed by October's partial government shutdown. Housing starts in October and September reached annualized rates of 889,000 and 873,000.