WASHINGTON, D.C. -- Nationwide production of new single-family homes rose 4.4% to a seasonally adjusted annual rate of 470,000 units in December, according to newly released figures from the U.S. Commerce Department. This marked a third consecutive increase and the fastest pace of single-family housing starts since April of 2010. Meanwhile, the overall number of housing starts for the month declined 4.1% to a 657,000-unit rate due to a 20.4% dip on the more volatile multifamily side.
"Today's report adds to the growing evidence that demand for new, single-family homes is finally starting to firm up in an increasing number of markets nationwide," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, NV. "This emerging trend is allowing builders to put more crews back to work, and could be even stronger if not for the overly tight credit conditions that prevail for both builders and buyers, as well as the continuing foreclosure crisis and the challenges of obtaining accurate appraisal values on new homes. Policymakers should be doing everything possible to alleviate these problems and nurture the fledgling housing recovery in order to promote job and economic growth."
"This report is in keeping with our expectations for slow but steady improvement in the single-family market, where production hit its lowest yearly rate in over 50 years in 2011," said NAHB Chief Economist David Crowe. "Meanwhile, it should be noted that the decline in multifamily starts in December was coming off a dramatic increase from the previous month and simply brought that sector back closer to trend. Apartment production generally continues to gain strength heading into 2012 after posting a more-than 50% gain in 2011." Looking forward, NAHB is forecasting gains of approximately 17% in both single- and multifamily housing production in 2012.
Combined single- and multifamily housing starts fell 4.1% to a 657,000-unit rate in December due to the multifamily side retreating 20.4% from a big gain in the previous month, to a seasonally adjusted annual rate of 187,000 units. However, for the year as a whole, overall housing production was pegged at 606,900 units, which was 3.4% better than the overall number of starts in 2010.
Regionally, December housing starts rose 54.8% in the Midwest following a big decline in the previous month. The Northeast posted a 41.2% decline that offset a big gain in the previous month, while the South and West also posted declines of 3.0% and 17.6%, respectively.
Permit issuance, which can be an indicator of future building activity, held virtually flat at a 679,000-unit rate in December. Single-family permits rose for a third consecutive month, by 1.8% to 444,000 units, while multifamily permits declined 3.7% to 235,000 units.
Regionally, permits rose 5.8% in the Midwest and held unchanged in the West, but declined 6.5% in the Northeast and 0.6% in the South in December.