November Housing Data: Single-Family Starts Climb 6.4% as Multifamily Activity Slows

Building Permits Suggest a Possible Uptick

Building permits for privately-owned housing units rose to a seasonally adjusted annual rate of 1,505,000 in November, reflecting a 6.1% increase from October’s revised figure of 1,419,000. However, this improvement was slightly below the November 2023 rate of 1,508,000, a mere 0.2% decline year-over-year. Single-family permits in November inched up by 0.1% to 972,000, suggesting steady demand in this segment. Multifamily permits for buildings with five or more units rose sharply to 481,000, hinting at potential new supply in the rental market.

The permit data underscores that developers remain cautiously optimistic, with growth in authorizations pointing to sustained activity in 2024, albeit at a tempered pace compared to earlier highs.

Housing Starts Show Divergent Trends

Total housing starts in November fell to an annualized rate of 1,289,000, marking a 1.8% decline from October and a sharper 14.6% drop compared to November 2023. Single-family starts provided a bright spot, increasing 6.4% month-over-month to 1,011,000. This growth aligns with stable demand in the single-family market, possibly buoyed by steadying mortgage rates and consistent buyer interest.

Conversely, multifamily starts fell to 264,000, reflecting a significant decline in activity. Developer caution in the rental market could stem from economic uncertainties or concerns over slower rental growth. The contrasting performance between single-family and multifamily starts highlights diverging investment priorities.

Housing Completions Indicate Supply Progress

Housing completions reached a seasonally adjusted annual rate of 1,601,000 in November, down 1.9% from October but up 9.2% from the previous year. Single-family completions climbed 3.3% month-over-month to 1,038,000, delivering much-needed inventory to the market and addressing homebuyer demand.

Meanwhile, completions of multifamily units held steady at 544,000, signaling that previously initiated projects are continuing to reach the market. While new multifamily construction appears subdued, ongoing completions indicate a commitment to fulfilling earlier supply plans.

Market Outlook Suggests Single-Family Strength

The November data suggests a bullish outlook for the single-family segment heading into 2025. Steady permit growth and a rise in starts signal confidence among developers, even as overall activity lags compared to a year ago. Multifamily construction remains under pressure, with declining starts likely to limit rental supply in the near term.

For traders, the single-family housing market appears more resilient, benefiting from stable demand. Multifamily developers, however, may exercise caution, potentially leading to tighter rental supply in the months ahead. Monitoring permit trends and completions will be crucial for anticipating shifts in market momentum.