Home builders showed plenty of enthusiasm in December, sending Housing Starts up 4.4%, to a way-better-than expected 1.089 million annual rate. Overall starts are up 5.3% compared to a year ago, with annualized growth of more than one million units for the fourth month in a row. In fact, more homes were started last year than any year since 2007. Single-family starts shot up 7.2% for the month and are up 18.4% over the last two years. Building Permits did drop 1.9% overall, but the falloff was all due to multi-family units, which are volatile month to month, while single-family permits reached their highest level since 2008.
All this activity added 132,100 new residential construction jobs in the past year. No wonder the National Association of Home Builders confidence index stays well over 50, meaning the majority of respondents feel conditions are good. Existing Home Sales were also up in December, although the 2.4% gain was less than expected. Nonetheless, versus a year ago, sales are up 3.5%, the median price is up 6.0%, and the months’ supply is down to 4.4 months. Low inventories are a problem, but experts say higher prices will bring in more sellers. November’s FHFA index of prices for homes financed with conforming mortgages saw its largest rise in 18 months.