RealNews

Housing starts rose 6.7% in October to an annual rate of 1,588,000 units, down 25.5% from the November 2005 rate. Building permits fell 3% to 1,506,000, down 31.3% from November 2005.

This is good news in the short run for the general economy as builder confidence rebounds and jobs in residential construction begin to pickup. The downside for the housing market is that the glut of available housing inventory was just beginning to clear out, so increased construction could delay a rebound in housing prices, especially for new homes. The potential is there that a too quick turnaround in construction could hurt home prices sufficiently to drag the whole housing market and the general economy (manufacturing, retail and jobs, jobs, jobs) down.

NEW RESIDENTIAL CONSTRUCTION IN NOVEMBER 2006
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new
residential construction statistics for November 2006:
BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of
1,506,000. This is 3.0 percent (±1.2%) below the revised October rate of 1,553,000 and is 31.3 percent (±1.2%) below the
November 2005 estimate of 2,191,000.
Single-family authorizations in November were at a rate of 1,144,000; this is 3.1 percent (±1.2%) below the October figure
of 1,181,000. Authorizations of units in buildings with five units or more were at a rate of 299,000 in November.
HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,588,000. This is 6.7 percent
*
(±10.1%) above the revised October estimate of 1,488,000, but is 25.5 percent (±5.8%) below the November 2005 rate of
2,131,000.
*
Single-family housing starts in November were at a rate of 1,281,000; this is 8.1 percent (±9.2%) above the October figure
of 1,185,000. The November rate for units in buildings with five units or more was 277,000.
HOUSING COMPLETIONS

Privately-owned housing completions in November were at a seasonally adjusted annual rate of 1,915,000. This is 0.2
* *
percent (±7.8%) below the revised October estimate of 1,919,000, but is 0.3 percent (±7.9%) above the November 2005
rate of 1,909,000.
*
Single-family housing completions in November were at a rate of 1,540,000; this is 1.0 percent (±7.9%) below the October
figure of 1,556,000. The November rate for units in buildings with five units or more was 304,000.

Complete report [PDF file in popup window]