U.S. December Housing Data Reflects Mixed Signals for Construction Sector

Building Permits Beat Expectations

Privately-owned housing units authorized by building permits in December reached a seasonally adjusted annual rate of 1.483 million, exceeding the market’s pre-report estimate of 1.46 million. However, this figure represents a 0.7% decline from November’s revised rate of 1.493 million and a 3.1% year-over-year drop compared to December 2023’s 1.53 million.

Single-family permits provided some optimism, rising 1.6% month-over-month to 992,000, while permits for multifamily units fell to 437,000. For the full year 2024, total housing units authorized reached 1.471 million, reflecting a 2.6% annual decline from 2023.

Housing Starts Significantly Exceed Projections

Housing starts surged in December to a seasonally adjusted annual rate of 1.499 million, beating the pre-report estimate of 1.33 million. This represents a robust 15.8% increase from November’s revised figure of 1.294 million, although it remains 4.4% lower year-over-year compared to December 2023’s 1.568 million.

Single-family starts showed modest growth at 1.05 million, rising 3.3% month-over-month, while multifamily starts came in at 418,000. For the entirety of 2024, housing starts totaled 1.364 million, a 3.9% decline from 2023.

Housing Completions Decline Month-over-Month

Housing completions in December dropped to an annual rate of 1.544 million, down 4.8% from November’s revised estimate of 1.621 million. This figure is also 0.8% lower year-over-year compared to December 2023’s 1.557 million.

Single-family completions fell 7.4% month-over-month, totaling 948,000, while multifamily completions were recorded at 570,000. Despite the monthly slowdown, annual completions for 2024 were 1.627 million, representing a 12.3% increase from 2023 as builders cleared backlogs.

Market Implications and Forecast

The December housing data presents a mixed outlook for traders. While building permits and housing starts beat expectations, the decline in housing completions—especially single-family units—signals potential bottlenecks in the construction process.

Short-term prospects remain cautiously bullish, with robust housing starts suggesting optimism among builders, while single-family permits indicate ongoing demand. Traders should watch for further clarity in January’s data to confirm sustained momentum in the residential construction sector.