Residential housing construction posted some of the most promising gains of the year in the latest joint report from the U.S. Census Bureau and the Department of Housing and Urban Development.
Data was especially strong for housing starts, which posted a 9.3 percent monthly gain from October. Rising from 627,000 units to 685,000, November’s totals are the highest level of the year, and are an impressive 24.3 percent above the November 2010 total of 551,000 units.
As HousingWire notes, those totals are far above what analysts had predicted. The most recent Econoday poll only foresaw an average gain of 636,000, and even the highest estimate only came out to 650,000.
Housing starts were not the only positive data, though. Both building permits and housing completions showed monthly gains. Permits were up 5.7 percent from October and 20.7 percent above November 2010, while privately-owned completions rose 5.6 percent monthly and 1.6 percent year-over-year.
There were variations, though, regarding the areas of construction that showed growth. For starts, permits, and completions, single-family data came out to gains of 2.3 percent, 1.6 percent and 0.7 percent, respectively, which seem small compared to the total increases the government departments reported.
Bill McBride’s analysis on Calculated Risk, though, explains where those additional gains are hidden – multifamily construction. Long predicted to increase in activity as more prospective homeowners turn to rentals (most recently by Freddie Mac economist Frank Nothaft in a series of 2012 predictions), the multifamily market seems to have accounted for a large share of the construction increases in November.
And if the predictions turn out to be true (including several from our most recent issue), it could continue to drive the construction market through 2012.