New-home construction slides in November as builders pull back MABA Massachusetts RealEstate FirstTimeHomeBuyers

 Housing starts slid in November as builders moved to complete homes already underway and cut back on seeking permits for new construction. Housing starts, which include construction of new single-family and multifamily residences, declined zero point five percent month over month to a seasonally adjusted annual rate 1,427,000 units, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development said in a press release. Year over year, starts were down sixteen point four percent.  New single-family home starts fell four point one percent from October’s revised annual estimate to 828,000, while multifamily starts rose four point eight percent to 584,000.

 On a yearly basis, the rate of single-family starts was down thirty two point one percent, while multifamily was up twenty four point five percent. Permits, a leading indicator of future new-home supply, fell eleven point twp percent month over month and twenty two point four percent year over year to 1,342,000 units, while housing completions jumped ten point eight percent month over month and six percent year over year to an annual rate of 1,490,000 in November. Compass President Neda Navab said the decline in permitting one of the largest monthly drops of the last decade and increase in completions could have “worrisome” long-term consequences for housing supply.

 “It’s not easy for builders to balance the short-term pullback in demand with the long-term need for more housing nationwide, but on the surface, it seems a more reasonable strategy would be to pull back on short-term starts and keep the longer-term permit pipeline as full as possible,” Navab said. “That builders have instead taken the opposite path clearing out those homes already permitted, but leaving the cupboard barer for tomorrow  does not bode well for a nation that remains under-built.”

 First American deputy chief economist Odeta Kushi said the month’s figures reflect waning homebuilder confidence, which has fallen for twelve consecutive months. “Housing demand is weakening, while builders continue to face higher costs and supply-side headwinds,” Kushi said. “As builders pull back on starting new projects, they will have greater opportunity to bring to market the backlog of homes in their pipelines that are already under construction.” 

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