- Housing starts dropped in November, and the drop was more than due to more than October’s big increase. For context, housing starts in November were the second lowest since October of last year.
- While starts fell in November, they continue to provide an important release valve for solid demand in the housing market, but still have much more room for growth. Starts in November were only 55% of their long-run average, but year-to-date they are up 4.8%.
- We’re confident that housing starts will grow slow and steady through 2017 and beyond. Yesterday’s large jump in homebuilder sentiment is a good sign that they think so too. This will bring continued relief to homebuyers who have been stymied by a supply-constrained market over the past few years.
Housing starts in November were at a seasonally adjusted rate of 1,090,000, which is a drop of 6.9% year-over-year and 18.7% month-over-month. Furthermore, the drop was more than due to October’s big increase. For context, housing starts in November were the second lowest since October 2015. That said, the historical view looks like there’s also more room for housing starts to grow. Controlling for the number of households in the U.S., housing starts are still only 55% of the 50-year average.
Though November’s drop is disappointing news for the housing market, we’re confident that housing starts will continue their slow and steady rise through 2017 and beyond. Yesterday’s large jump in homebuilder sentiment is a good sign that they think so too. More starts in 2017 will be welcome news for homebuyers who have been stymied by a supply-constrained market over the past few years.
