December 18, 2009
Nationwide housing production rose 8.9% to a seasonally adjusted annual rate of 574,000 units in November 2009, according to figures released by the U.S. Commerce Department. The gain represented a partial bounce-back from an exceptionally slow month for housing activity in October, and was largely attributed to a big increase on the multifamily side.
“The fact that both starts and permits for new housing production rose last month is a good sign that we’re headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “That said, the November improvement was primarily on the multifamily side, and poor job markets and other economic factors are still keeping many potential buyers on the fence for the time being.”
“Home builders remain very cautious about starting new homes, and overall housing production is still down on a three-month average basis,” noted NAHB Chief Economist David Crowe. “Understandably, it will take some time for the newly extended and expanded home buyer tax credit to start boosting sales in individual markets–just as it did the last time such an incentive was enacted. However, the fact that permits increased in November is a hopeful indication that the desired impact of the tax credit on housing demand may be forthcoming early in 2010. In the meantime, credit for new housing production remains extremely difficult to come by, posing significant obstacles to builders with viable projects.”
Single-family housing starts made up some of the ground they lost in October, posting a modest 2.1% gain to a seasonally adjusted annual rate of 482,000 units in November. Meanwhile, multifamily starts rebounded from an all-time record low in the previous month with a 67.3% gain to a seasonally adjusted annual rate of 92,000 units in November.
Gains in housing production were registered across all regions of the country in November, with a 16.4% increase in the Northeast, a 3% gain in the Midwest, a 12.3% increase in the South and a nearly 2% gain in the West.
Permit issuance, which can be an indicator of future building activity, rose 6% in November to a seasonally adjusted annual rate of 584,000 units, its highest level in a year. Single-family permits rose 5.3% to 473,000 units, while multifamily permits rose 8.8% to 111,000 units.
Three out of four regions posted gains in housing permits for November, with a 4.7% increase reported in the Northeast, a 10.7% increase posted in the South, and a 2.7% gain registered in the West. The Midwest posted a 1.9% decline.