New Home Construction, Buyer Traffic Rise in North America
According to the U.S. Housing and Urban Development and Commerce Department, total housing starts increased by 3.8 percent in October 2019, consisting of 1.31 million units. Housing starts indicates the number of privately-owned new houses on which construction has been started in a given period.
Housing starts data is divided into 2 parts: single-family houses, and multifamily sector, which includes apartment buildings and condos. Within this overall number, single-family starts increased 2.0 percent to 936,000 units. The multifamily sector increased by 8.6 percent to 378,000 units.
Greg Ugalde, chairman of the National Association of Home Builders (NAHB), said in a statement, “Homebuilders are seeing more building opportunities as market conditions remain solid. Builder sentiment remains strong, and we are seeing an uptick in buyer traffic.”
While NAHB chief economist Robert Dietz commented, “Led by lower mortgage rates, the pace of single-family permits has been increasing since April, and the rate of single-family starts has grown since May. Solid wage growth, healthy employment gains and an increase in household formations are also contributing to the steady rise in home production.”
On a regional basis, combined single-family and multifamily start in October are 6.8 percent higher in the South. Starts are down 0.5 percent in the Northeast, 7.4 percent in the Midwest and 10.3 percent in the West. Overall permits increased 5.0 percent to 1.46 million units annualized rate in October. Single-family permits rose 3.2 percent to a 909,000 rate while multifamily permits increased 8.2 percent to a 552,000 pace.
The National Association of Realtors Chief Economist Lawrence Yun also said, “Tremendously good news for the housing sector: the issuance of housing permits booming ahead to their highest level in over a decade. At 1.46 million units on an annualized basis, housing permits are near to the level needed for the country over the long haul. Since new home construction kicks off the chain reaction of people trading-up and trading-down by buying new and selling their existing homes, more housing inventory will surely show up in the market next year.”