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Housing Starts: Further Gains To Close '21

January 19, 2022
Bottom Line:  After falling in September and October, housing starts rebounded sharply in November and added modestly to those gains in December. Single-family sales were slightly lower in December, but multifamily sales gained. After moving sideways for much of 2021, the trend turned somewhat higher in the 4th Quarter, which saw an annualized run rate of 1.64 million units, above the 12-month pace of just under 1.6 million. Building permits suggested that the trend could continue into the 1st Quarter of this year and probably beyond, despite higher mortgage rates. Overall, the growth tailwind from housing was well below 2020's pace, but the sector continued to add modestly to overall economic growth and was unlikely to turn into a drag on the economy as activity remained historically robust.
Housing Starts ROSE by 1.4% in December to 1702k, compared with market expectations for a decline to 1650k. Meanwhile, the prior month was revised slightly lower from 1,679k to 1,678k.  Housing starts are now 2.5% ABOVE their year-ago level.  However, they are still a sharp 25.1% BELOW their January 2006 peak.

Single Family Housing Starts
FELL by 2.3% to 1172k. Single family housing starts are 10.9% BELOW their year-ago level but still 35.7% BELOW their January 2006 peak.
Multifamily Housing Starts ROSE by 5.0% to 530k. Multifamily starts are now 53.2% ABOVE their year-ago level.