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Housing Starts Soar in December to Highest Level Since 2008

by Reno Manuele

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Housing starts were up 12.1 percent in December, as the residential housing construction market roared through 2012 into what looks like a very promising 2013.

Housing starts soared in December, climbing 12.1 percent from November and 36.9 percent from December 2011 to a seasonally adjusted annual rate of 954,000, according to the latest numbers from the U.S. Census Bureau and the Department of Housing and Urban Development.

That is the highest level of housing starts since 2008, and according to analysis by Calculated Risk’s Bill McBride, housing starts have now doubled from their post-bubble low.

 

Huge Numbers for Housing Starts, Single-Family Housing

In addition to the Census Bureau’s numbers on total housing starts, the agency reported that single-family housing starts also saw strong growth in December, increasing 8.1 percent from November. Other notable details in the Census Bureau’s report included:

    • Altogether in 2012, there were an estimated 780,000 housing units started, a 28.1 percent increase over 2011’s 608,800 units.
    • The December rate of housing starts for buildings with five or more units was 330,000, a 43 percent increase over November.
    • Housing completions also showed strong numbers in December, rising by 1.6 percent from November and 13.2 percent from December 2011; single-family completions were up 3.7 percent from November.
    • For all of 2012, there were an estimated 651,400 housing units completed in 2012, a 11.4 percent uptick from 2011.
    • And as BMO Financial Group pointed out, the Midwest boasted the strong yearly gains in the country, with housing starts increasing 24.7 percent in the region.

    Building Permits and Housing Construction in 2013

    Finally, the Census Bureau’s data on building permits suggested further construction activity in 2013. For December, building permits were up 0.3 percent from November and 28.8 percent from December 2011; additionally, single-family authorizations in December hit an annual rate of 578,000, a 1.8 percent increase from November, and buildings with five units or more were at a rate of 301,000, a 34 percent increase from November.

    But most encouraging of all, there were an estimated 813,400 building permits authorized in 2012, a 30.3 percent increase over 2011’s 624,100 building permits.

    As Jed Kolko, Trulia’s chief economist, noted in comments following the Census Bureau’s report, construction activity in 2012 shifted to the multifamily sector, a trend that should continue into 2013 if architecture billings are any indication (31 percent of 2012’s new starts, Kolko said, were for multifamily units, compared to 20 percent of starts over the psat 20 years).

    And finally, Kolko pointed out an interesting anomaly in the data – though housing starts were up 28 percent in 2012, housing completions were up just 11 percent, meaning that we can expect more units to hit the marketplace in 2013.

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