New Construction Rises Amid Higher Lumber Prices

The pace of permitting for new construction on housing units has also increased in November. 

According to Market Watch, U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.68 million in November, representing a nearly 12% increase from the previous month, the U.S. Census Bureau reported Wednesday. Compared with November 2020, housing starts were up roughly 8%.

The pace of permitting for new housing units also increased in November. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.71 million, up roughly 4% from October and 1% from a year ago.

Economists polled by MarketWatch expected housing starts to occur at a median pace of 1.66 million and building permits to come in at a median pace of 1.56 million.

Housing starts rose for both single-family and multifamily projects. The Midwest was the only region where new construction activity decreased overall, with a 7.3% downturn. Meanwhile, in the Northeast, there was a nearly 28% increase in housing starts on a monthly basis.

Compared with last year, housing starts were down in the Northeast and West, but up in the Midwest and South.

The increase in permitting was driven by an 6% jump in the number of multifamily buildings authorized, as the number of single-family homes that were permitted only increased 2.7% on a monthly basis. There was a decrease in the number of permits issued for duplexes, triplexes and quadplexes.

There was also a 1.5% increase in the number of approved projects where construction had yet to begin, driven by a backlog of multifamily projects. However, there was a nearly 20% monthly increase in the number of multifamily projects where construction was completed. Comparatively, single-family completions were essentially flat as compared with October.

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