Housing Starts Down in December But Permits Show Early Signs of Recovery
Nationwide housing production fell four percent in December to a seasonally adjusted annual rate of 557,000 units, according to data released today by the U.S. Commerce Department. Meanwhile, permit issuance, which can be a future sign of housing activity, rose 10.9 percent last month to a seasonally adjusted annual rate of 653,000 units.
"Builders have acted prudently by cutting back production during a period of low demand and uncertainty in the overall market, and these trends are reflected in our recent builder surveys," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "With inventories so low, we’re seeing an increase in permits as builders understand they need to ramp up production to take full advantage of the short window offered by the home buyer tax credit and the expectations of increased demand as the economic recovery begins to take hold later in the year."
Single-family housing starts fell 6.9 percent in December to a seasonally adjusted annual rate of 456,000 while multifamily starts posted a 12.2 percent gain to a seasonally adjusted annual rate of 101,000 units.
Single-family permits rose 8.3 percent to a seasonally adjusted annual rate of 508,000 units in December while multifamily permits were up 20.8 percent to 145,000 units.
On an annual basis, year-end figures from the Commerce Department show that overall housing starts declined 38.8 percent to 554,000 units. Single-family starts were down 28.7 percent for the year to 444,000 units while multifamily starts declined 61.1 percent to 110,000 units.
"These figures give us the first estimate of the worst year we’ve seen for housing production since the Census began recording these numbers," said NAHB Chief Economist David Crowe. "We remain cautiously optimistic about a recovery in 2010, as job growth begins to show positive signs by mid-year."
Regionally, housing starts in December were down 19 percent in the Northeast, 18.5 percent in the Midwest and 0.9 percent in the West. The South posted a 3.3 percent gain.