Housing Starts Fall Less Than Expected, But Permits Drop Sharply in November 

Dark Clouds Remain, Although Lower Mortgage Rates Offer Builders a Ray of Hope

Source: Economics Group of Wells Fargo Bank, N.A.Summary Residential Construction Weakens Again in November

  • Total housing starts fell 0.5% to a 1.427 million-unit pace in November. The monthly decline was less severe than expected. Starts during October were revised slightly higher and now show a more modest 2.1% drop.
  • A sharp retreat in building permits overshadows November’s mild slip in starts. Total building permits plummeted 11.2% during the month, the second straight decline. Both single-family (-7.1%) and multifamily (-16.4%) permits slid in November.
  • The broad-based drop indicates that builders and developers are planning to significantly cut-back construction against a backdrop of higher interest rates and elevated economic uncertainty.