Increase in Building Permits, Decrease in Housing Starts Seen in December

• In December, building permits exceeded projections, experiencing a 1.9% rise from November.
• Housing starts saw a 4.3% drop in December; however, they maintained a 7.6% increase compared to December 2022.
• Despite the decrease in housing starts, building permits outperformed expectations, revealing the housing market's resilience.

 Building Permits Overview

In December, the seasonally adjusted annual rate of privately-owned housing units authorized by building permits reached 1,495,000, showing a 1.9% increase from November. Furthermore, this rate was 6.1% higher than that of December 2022. Specifically, single-family authorizations in December totaled 994,000, indicating a 1.7% increase from November. At the same time, authorizations for units in buildings with five units or more amounted to 449,000 in December. However, looking at 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 Overview

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,460,000, indicating a 4.3% decrease from November. Nevertheless, this figure remained 7.6% higher than December 2022. In particular, single-family housing starts in December were at a rate of 1,027,000, signifying an 8.6% decline from November. Conversely, 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 Overview

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. Particularly, single-family housing completions in December reached 1,056,000, demonstrating an 8.4% increase 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 Synopsis

The data indicates a combination of trends, with an increase in building permits but a decrease in housing starts. However, both were higher than the estimates. The completion rate is notably higher, suggesting potential opportunities in the housing market. This intricate landscape necessitates vigilant monitoring for investors and industry stakeholders.