Nationwide housing production rose 8.9 percent to a seasonally adjusted annual rate of 574,000 units in November, according to the U.S. Commerce Department. The gain represented a partial bounce-back from an exceptionally slow month for housing activity in October, and was largely attributed to a big increase on the multi-family side.
“The fact that both starts and permits for new housing production rose last month is a good sign that we're headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “That said, the November improvement was primarily on the multi-family side, and poor job markets and other economic factors are still keeping many potential buyers on the fence.”
“Home builders remain very cautious about starting new homes, and overall housing production is still down on a three-month average basis,” noted NAHB Chief Economist David Crowe. “It will take some time for the newly extended and expanded home buyer tax credit to start boosting sales in individual markets — just as it did the last time such an incentive was enacted. However, the fact that permits increased in November is a hopeful indication that the desired impact of the tax credit on housing demand may be forthcoming early in 2010. In the meantime, credit for new housing production remains extremely difficult to come by.”
Single-family housing starts made up some of the ground they lost in October, posting a modest 2.1 percent gain to a seasonally adjusted annual rate of 482,000 units in November. Meanwhile, multi-family starts rebounded from an all-time record low in the previous month with a 67.3 percent gain to a seasonally adjusted annual rate of 92,000 units in November.
While the housing starts pointed toward an improving market, another indicator showed that builders are still pessimistic about market conditions. According to the latest NAHB/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built, single-family homes receded one point to 16 points in December, its lowest reading since June.