Housing starts and new building permits both posted declines in November while building completions logged a monthly increase during the same period, according to U.S. Census Bureau data released Tuesday.
Newly issued building permits dropped 11.2 percent between October and November to a seasonally adjusted rate of 1,342,000, which was 22.4 percent lower than in November 2021, according to new Census Bureau data.
Housing starts fell 0.5 percent below October levels, inching to a seasonally adjusted rate of 1,427,000, 16.4 percent lower than their November 2021 levels, and the lowest level since May 2020, according to the National Association of Home Builders (NAHB).
Housing completions increased on both the monthly and annual levels, increasing 10.8 percent from their October levels to a seasonally adjusted rate of 1,490,000, 6 percent higher than their November 2021 levels.
The continued declines of both new permits and housing starts comes as builders pull back production in the face of weakening buyer demand and high construction costs due to inflation. Data released on Monday by the NAHB showed that builder confidence in the market for single family homes declined every month of 2022.
It’s no surprise single-family starts are running at their lowest level since May 2020, given that builder sentiment has dropped in 12-consecutive months as builders remain fixated on rising building material costs and supply chain bottlenecks, with electrical transformers in particular being in short supply,” NAHB Chairman Jerry Konter said in a statement.
November’s data saw a continuation of the recent trend of more homes being finishing construction than new homes starting construction, as builders wrap up projects that started before the market decline, with 25,500 more single-family homes completed than started during November.
“One important characteristic of the single-family housing market is that there have been more single-family homes that completed construction than have been started over the past four months,” said NAHB Chief Economist Robert Dietz. “The most recent data for November shows there were 25,500 more single-family homes completed than started, thus pushing down the number of new homes under construction.”
The regional breakdown shows combined single-family and multifamily starts were 1.3% higher in the Northeast, 0.8% higher in the Midwest, 0.6% higher in the South and 7.0% lower in the West during November.
