After a disappointing November, new home construction increased 15.8% in December, driven by a nearly 62% surge in multifamily projects. Single-family home starts also saw a modest monthly rise. However, Building Permits, indicating future construction, were down 0.7% overall.
What’s the bottom line?
Household formations are at an annualized rate of 1.9 million, while Housing Starts are only at 1.5 million. This indicates a significant imbalance in demand versus supply and should be supportive of home values going forward.