Housing production nationwide edged up 11.3 percent on a seasonally adjusted basis in December due to a surge in multifamily construction, the Commerce Department reported this week. Multifamily production – often viewed as volatile month-to-month – surged 57 percent to 431,000 units in December.
Single-family starts, on the other hand, fell 4 percent to a seasonally adjusted annual rate of 795,000 units. But builder sentiment remains high for the single-family market’s outlook.
“Despite the slight dip in single-family production, December’s rate is still the fourth highest single-family pace since the Great Recession, and single-family starts also posted solid gains for the year,” says Granger MacDonald, chairman of the National Association of Home Builders. “Builders remain confident and we expect further growth in the single-family market in the year ahead.”
Across the country, combined single and multifamily housing production increased 31.2 percent in the Midwest; 23.5 percent in the West; and 18.5 percent in the Northeast. The South was the only major region to post a loss, dipping 1.4 percent last month.
"This report represents firm growth for housing in 2016, as single-family starts rose 9 percent and multifamily production was down slightly," says Robert Dietz, NAHB’s chief economist. "We expect that 2017 will be another year of gradual, steady improvement in the housing market. Multifamily starts have been volatile in recent months, but should level off as supply meets demand. Meanwhile, single-family production continues to gain momentum but is limited by supply-side headwinds."
Single-family permits – a gauge of future construction – increased 4.7 percent to 817,000 units in December. That is the highest level in 2016. Multifamily permits, however, dropped 9 percent to 393,000 units, the Commerce Department reports.
Source: National Association of Home Builders