Housing news this week was dominated by construction reports. Well, maybe dominated is too strong a word–there wasn’t much competition.
A burst of enthusiasm on the part of homebuilders last month had carried the National Association of Homebuilders (NAHB) Housing Market Index to a 12-year high. NAHB said builder confidence moderated a bit this month; its members took back a third of last month’s 6-point gain.
Residential construction figures for December, issued by the Census Bureau on Thursday, reflect some of the builders’ shakiness, and the housing start numbers continue what Econoday calls “their wild ride of volatility.” They were down some 18% in November on the heels of a huge October gain then rose significantly in the new report. The headline number, an 11.3% gain, isn’t as good as it looks. The December increase was entirely in the multi-family sector–starts there shot up by nearly 54%–while single family starts actually dropped.
Lawrence Yun, National Association of Realtors’ chief economist said the data was good news, but continued, “As evidenced by the brisk pace of rent and home-price growth, the country desperately needs more housing units. Aside from providing consumers with more choices, the increased construction also brings the added benefit of boosting economic growth and job creation. Ideally, housing starts should be in the range of 1.5 to 1.6 million.”
We remain a long way from that. December starts were at an annual rate of 1.23 million units, only 795,000 of which were single-family homes.
Construction permitting slipped 0.2% from November, but looked a little better for single-family building–those permits were up 4.7%. There were 1,186,900 permits issued over the entire year.
In the mood to sell? Realtor Magazine says despite the conventional wisdom about the spring market, listing early this year might bring better overall results. Agents are noting much heavier buyer demand than is usual off-season, probably triggered by rising rates. Forecasts for the new year point to an expanding economy and even more demand. With inventories continuing at record lows, sellers who list now won’t have a lot of competition.
But the real payoff of getting your home sold ASAP comes if, like most people, you plan to buy again. You can jump into the market ahead of other move-up buyers who have not yet sold–and lock in today’s interest rates for good measure.
And speaking of rates, they dropped again, down another 3 basis points for a total decline of 23 basis points since New Year’s Eve. The spring market is looking to be a great one.