Housing Starts: Increase Sharply

Housing Starts ROSE by 10.5% in November to 1173k, compared with market expectations for an increase to 1130k. Meanwhile, the prior month was revised slightly higher from 1,060k to 1,062k. Housing starts have been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 and are now 16.5% ABOVE their year ago level. However, they are still a sharp 48.4% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 7.6% to 768k, highest level since January 2008. Single family housing starts are now 14.6% ABOVE their year ago level but still a stunning 57.9% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 16.4% to 405k, their highest level since September. Multifamily starts have been on a moderately improving trend, amid substantial volatility, over the past 2 years and are now 20.2% ABOVE their year ago level. Housing starts were mixed across regions. Housing starts in the South saw sharp gains, up 21.3% and are now 12.3% above their 12-month average. The starts in Northeast saw moderate declines, down 8.5% and are 2.4% below their 12-month average. Bottom Line: Housing starts climbed sharply, more than expectations after declining last month. The three month average is now 1147k, still slightly below the 6-month average of 1154k, but above the 12 month average of 1100k. The gains were driven by single-family starts, their highest level since January 2008. Multifamily starts rose moderately as well. Building permits increased by 11.0% and, while volatile, suggest strength in coming months. Single-family permits rose slightly while multi-family permits rose sharply. Overall, the progress in the housing market has been gradually improving this year as starts are averaging above 1.1 million annualized.