Housing Starts Rise for First Time in Three Months

U.S. Homebuilders in November began construction on more homes than they have in three months, producing a better-than-expected growth rate.
The Commerce Department announced Thursday that housing starts in November rose 3.9 percent to a seasonally adjusted annual rate of 555,000. Economists had expected a rate of 545,000 after October’s number of 519,000.
While November marked an 18.2 percent decrease in multi-family home starts, the month also saw a 6.9 percent increase in single-family new home construction.
The Midwest marked the biggest increase in housing starts, a whopping 15.8 percent. Housing starts rose in the South, 2.3 percent, and the West, 2.1 percent, but fell in the Northeast by 2.5 percent.
The unfortunate news was a drop in builder permits, which indicate future housing demand. For the month of November, building permits fell 4.0 percent to an annual rate of 530,000 from the revised 552,000 the previous month.
This is not as bad as it was in November 2009, when housing starts were down 5.8 percent and building permits dropped by 14.7 percent.
According to the National Association of Home Builders, each new home constructed creates the equivalent of three jobs for a year and generates about $90,000 in taxes.
But with less new construction, at least we’ll hopefully see a quicker liquidation of the huge existing home inventory across the country and in the Chicago area.