Housing Starts Drop 6.6 Percent on Top of Negative Revisions

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Housing starts and permits continue to flounder as completions slowly rise.

Housing starts dropped 6.6 percent in December according to the Census Bureau’s New Residential Construction Report.

Building Permits

Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,495,000. This is 1.9 percent above the revised November rate of 1,467,000 and is 6.1 percent above the December 2022 rate of 1,409,000.
Single-family authorizations in December were at a rate of 994,000. This is 1.7 percent above the revised November figure of 977,000.
Authorizations of units in buildings with five units or more were at a rate of 449,000 in December. An estimated 1,469,800 housing units were authorized by building permits in 2023. This is 11.7 percent below the 2022 figure of 1,665,100.

Housing Starts

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,460,000. This is 4.3 percent (±12.5 percent) below the revised November estimate of 1,525,000, but is 7.6 percent (±17.6 percent) above the December 2022 rate of 1,357,000.
Single-family housing starts in December were at a rate of 1,027,000; this is 8.6 percent (±11.2 percent) below the revised November figure of 1,124,000.
The December rate for units in buildings with five units or more was 417,000. An estimated 1,413,100 housing units were started in 2023. This is 9.0 percent (±2.5 percent) below the 2022 figure of 1,552,600.

Housing Completions

Privately-owned housing completions in December were at a seasonally adjusted annual rate of 1,574,000. This is 8.7 percent (±19.9 percent) above the revised November estimate of 1,448,000 and is 13.2 percent (±17.7 percent) above the December 2022 rate of 1,390,000.
Single-family housing completions in December were at a rate of 1,056,000; this is 8.4 percent (±18.5 percent) above the revised November rate of 974,000. The December rate for units in buildings with five units or more was 509,000.
An estimated 1,452,500 housing units were completed in 2023. This is 4.5 percent (±3.8 percent) above the 2022 figure of 1,390,500.

Margins of Error

Note the margins of errors on starts (±12.5 percent)and completions (±19.9 percent).

The Census Department has little faith in the numbers and neither do I.

Housing Starts 1959-Present

Housing starts are well below where they were in 1959.

The average since 1959 is 1,284. So starts are 13.7 percent above average but 11.9 percent below January 1959. Hooray!?

We are nearly smack in the middle of immense swings.

Housing Starts Single Family vs Multi-Family

Housing Units Under Construction and Completed Units

We are near the record number of units under construction.

Existing Home Sales Rise 0.8 Percent, Only the Third Increase in 22 Months

Existing home sales rose in November. The National Association of Realtors chief economist, Lawrence Yun, eyes a “marked turn”.

Mortgage rates are down from a peak of 7.9 percent to 6.89 percent. This may entice some buyers, but for how long?

I see no basis for a “marked turn”.