December Sees Building Permits Rise, Housing Starts Fall

Key Points

In December, privately-owned housing units authorized by building permits reached a seasonally adjusted annual rate of 1,495,000, surpassing November’s rate by 1.9%. This figure is also 6.1% higher than December 2022. Specifically, single-family authorizations in December stood at 994,000, marking a 1.7% increase from November. Meanwhile, authorizations for units in buildings with five units or more were at a rate of 449,000 in December.

However, in the broader context of 2023, an estimated 1,469,800 housing units were authorized by building permits, representing an 11.7% decrease compared to 2022.

Housing Starts

December saw privately-owned housing starts at a seasonally adjusted annual rate of 1,460,000. This figure reflects a 4.3% decrease from November but remains 7.6% higher than December 2022. Single-family housing starts in December were at a rate of 1,027,000, indicating an 8.6% decline from November. In contrast, units in buildings with five units or more had a December rate of 417,000.

For the entirety of 2023, an estimated 1,413,100 housing units were initiated, representing a 9.0% decrease compared to 2022.

Housing Completions

December recorded privately-owned housing completions at a seasonally adjusted annual rate of 1,574,000, marking an 8.7% increase from November and a substantial 13.2% rise from December 2022. In particular, single-family housing completions in December reached 1,056,000, up by 8.4% from November. Meanwhile, units in buildings with five units or more had a December rate of 509,000.

In the full year of 2023, an estimated 1,452,500 housing units were completed, indicating a 4.5% increase compared to 2022.

Short-Term Forecast:

The data suggests mixed trends, with increased building permits but decreased housing starts. However, they were both higher than the estimates. The completion rate is notably higher, indicating potential opportunities in the housing market. This complex landscape warrants careful monitoring for investors and industry stakeholders.