US Housing Report for November 2023: Building Starts Surge, Permits Dip

Highlights

• Building permits saw a 2.5% drop in November but remained 4.1% higher than the previous year.
• Housing starts exceeded expectations with a 14.8% increase, driven by significant growth in single-family starts.
• Housing completions increased by 5.0% in November but remained 6.2% below the previous year.

November 2023 Housing Report Shows Divergence from Estimates

The latest housing report for November 2023, released on December 19, 2023, has brought some surprises as the figures diverged from pre-report estimates. The data, provided by the U.S. Census Bureau, reveals key insights into building permits, housing starts, and completions.

Building Permits

In November, privately-owned housing units authorized by building permits were at a seasonally adjusted annual rate of 1,460,000. This represents a 2.5 percent drop from the revised October rate of 1,498,000. However, it’s worth noting that the November 2023 rate is still 4.1 percent higher than the same month last year, standing at 1,402,000. Single-family authorizations in November showed resilience, coming in at 976,000, marking a 0.7 percent increase compared to the revised October figure of 969,000. Authorizations for units in buildings with five units or more reached a rate of 435,000 in November.

Housing Starts

November saw privately-owned housing starts at a seasonally adjusted annual rate of 1,560,000, surpassing expectations with a 14.8 percent increase compared to the revised October estimate of 1,359,000. This figure is also 9.3 percent higher than the rate recorded in November 2022, which stood at 1,427,000. Single-family housing starts experienced significant growth, reaching a rate of 1,143,000 in November, an impressive 18.0 percent increase compared to the revised October figure of 969,000. The rate for units in buildings with five units or more was 404,000 in November.

Housing Completions

Privately-owned housing completions in November reached a seasonally adjusted annual rate of 1,447,000. This marks a 5.0 percent increase compared to the revised October estimate of 1,378,000. However, it is worth noting that completions are 6.2 percent below the rate recorded in November 2022, which was 1,543,000. Single-family housing completions in November were at a rate of 960,000, reflecting a 3.2 percent decrease compared to the revised October rate of 992,000. The rate for units in buildings with five units or more was 472,000.

Short-Term Forecast

The housing market’s surprising performance in November indicates a mixed trajectory. While building permits faced a slight decline, housing starts showed robust growth, especially in the single-family segment. The market appears to be influenced by a variety of factors, and it will be essential to monitor these trends closely to determine the short-term direction.

Conclusion

In conclusion, the November 2023 housing report has delivered a blend of results, with building permits slightly lagging behind expectations, while housing starts exceeded them. These figures provide valuable insights into the current state of the housing market, which traders and investors should closely watch in the coming months.