Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses housing starts and permits.

  • Relative to the same time last year, single family housing starts grew for the second consecutive month in November, while permits for construction have grown for four consecutive months.  Multifamily starts continued their strength with their third consecutive double digit increase compared to last year.
  • This morning’s report from the Census Bureau suggests that single family builders are seeing pockets of opportunity.  While demand for multifamily production has been strong for some time reflecting robust rent growth, the modest, but consistent improvement in single family construction and permitting points to localized improvements in the balance of supply with demand as well as consumer demand for product that is not satisfied by the current inventory.
  • The modest improvement on the construction front is important for two reasons.  First, as construction moves back to its long-term trend, more workers will be needed in this labor-intensive industry.  New jobs mean more spending, better tax collection and less strain on underwater homeowners.  Second, improved construction suggests that builders are seeing localized improvement in supply conditions, which bodes well for home prices, buyer confidence, and a move toward stabilization in the distressed market.   While today’s report is no panacea for housing and the economy, it is a sign of green shoots.
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