Source: Economics Group of Wells Fargo Bank, N.A.
Summary
November Gain in Both Single Family and Multifamily Starts
Total housing starts bested consensus estimates and surged 14.8% to a 1.56 million-unit pace. November’s gain was broad based, with single-family and multifamily starts rising sharply during the month. A modest rise in single-family permits and steep decline in multifamily permits takes some shine off the massive gain in starts. Unseasonably warm weather in November, which likely allowed more projects to get underway, may explain the divergence in starts and permits. That noted, the NAHB Housing Market Index improved for the first time in four months during December, with notable increases in the future sales and buyer traffic components. All told, the surprising pick-up in residential activity recently indicates that home builders are becoming more optimistic as mortgage rates trend lower and economic growth remains resilient.
Single Family Looks to be Improving as Financing Costs Drop
- Single-family starts soared 18% to a 1.143 million-unit pace during November, the strongest pace since April 2022. Single family starts have now risen for three straight months, bringing the seasonally adjusted annual rate of activity up 42.2% over the past year.