The rate of U.S. home building slipped in November as Hurricane Sandy battered the East Coast, slowing construction in its wake.
The annual rate at which builders break ground on homes dropped 3.0 percent in November to 861,000 units from a revised October rate of 888,000, according to the U.S. Department of Commerce figures released today; the October rate was the fastest pace since July 2008. Still, the current rate is 21.6 percent above the November 2011 pace of 708,000. Single-family housing starts in November were at a rate of 565,000; this is 4.1 percent below the revised October figure of 589,000.
Regionally, combined single- and multifamily starts activity was mixed in November. While the Midwest and South posted respective gains of 3.3 percent and 2.9 percent, the Northeast and West posted respective declines of 5.2 percent and 19.2 percent.
"Many builders have reported improving conditions in their local housing markets and are increasingly optimistic about the spring buying season, but they are being very careful not to get ahead of demand," observed Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Meanwhile, tight credit conditions are still the chief obstacle to a quicker recovery."
"The starts report for November reflects a readjustment to a more sustainable level of production following significant gains in the previous two months," said NAHB Chief Economist David Crowe. "That said, starts in this quarter are still running well ahead of the third quarter, and we are on track for a projected 25 percent improvement in housing production for all of 2012. Moreover, the fact that issuance of building permits hit its fastest rate since July of 2008 in November is indicative of the continued, modest growth that we expect to see in new-home construction through 2013."
