Housing starts changed very little in late 2022, but permits fell

North American housing start continued to underperform towards end of last year

Housing starts in November last year remained on a slight downward trajectory, falling to a seasonally adjusted annual rate of 1.427 million units. Starts were down 0.4% month over month, but trailed the year-ago pace by 16.4%, according to the US Census Bureau.

Single-family starts remained the particular laggard, dipping 4.1% from their October 2022 level to 828,000 units. That’s down 32.1% from the November 2021 reading. Multifamily starts remained resilient, climbing 4.9% on a monthly basis. The increase pushed multifamily starts to 599,000 units, 23.3% above the year-ago level.

On a regional basis, monthly drops were most pronounced in the Northeast, where they fell 18.6% month over month. Starts in the Midwest also dipped, while the South and West registered 0.1% and 8.3% increases, respectively.

Builder sentiment, as tracked by the National Association of Home Builders, has been persistently weak. The NAHB/Wells Fargo Housing Market Index fell two points this month to a reading of 31. That’s the 12th straight monthly decline in the index, and the lowest reading since 2012 with the exception of early pandemic levels.

“It’s no surprise that single-family starts are running at their lowest level since May 2020, given that builder sentiment has dropped for 12 consecutive months as builders remain fixated on rising building material costs and supply chain bottlenecks, with electrical transformers in particular being in short supply,” said Jerry Konter, chairman of the NAHB.

While market reaction to the November report was muted, wood products’ traders did take note of the plunge in permits. Housing permits fell 11.2% month over month to 1.342 million units (SAAR). Total permits have fallen 22.4% from the year-ago pace.

A surge in housing units completed helped close the historic gap that had developed between starts and completions. Completions climbed 10.8% to 1.490 million units (SAAR). November marked the first time completions have surpassed starts since 2020.

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