The U.S. Census Bureau reported Friday that total housing starts rose 16.9% in December 2019 from November 2019 to 1.6 million—an annual increase of 40.8%.
Single-family housing starts rose 11.2% in December 2019 from November to 1.05 million, while permits fell slightly from the prior month.
“As close to 5 million millennials turn 30 this year and enter their prime home-buying stage, demand for housing is ramping up. Riding a wave of favorable financing, younger buyers have embraced homeownership, drying housing inventory to two-year low,” said realtor.com’s Senior Economist Geroge Ratiu. “With the generation’s rallying crying that there are not enough affordable homes, it is clear that there is ample room in the market for a significant increase in new construction, especially in the entry- and mid-level price segments.”
Building permits in December 2019 rose 3.9% from the month prior to a rate of 1.4 million. Single-family permits were down from November by 0.5%.
“Housing demand has outstripped supply since 2009. The last report of 2019 represents modest progress towards bridging the gap between supply and demand, as the number of completed homes, which is additional new net supply added to the housing stock, increased by nearly 20 percent compared with a year ago,” said Odeta Kushi, First American Deputy Chief Economist.
December also saw 1.27 million homes completed—a 5.1% increase from November and a 19.6% year-over-year increase.
The midwest and western regions recorded a month-over-month increase in housing permits at 0.5% and 3.8%, respectively. The northeast posted a 15.7% decline in housing permits from November.
Every region posted an increase in housing starts, with the midwest leading the way at 37.3%
Additionally, home-sale prices rose 6.9% annually in December to an average of $312,500 across the 217 metros Redfin tracks. Home prices rose 1.1% from November, which is the largest increase since February 2018.
“Low mortgage rates and a strong economy fueled homebuyer demand in December, which boosted both home sales and prices,” said Redfin Chief Economist Daryl Fairweather. “Prices heated up in West Coast metros like Seattle, Washington, and Los Angeles, California, which indicates the slowdown of 2019 has officially ended in these markets.”
Just two of the 85 largest metros tracked by Redfin recorded annual declines: New York and San Francisco, California.
Sale prices in San Francisco fell 1.7% and they fell 2.4% in New York, as the city’s new “mansion tax” on homes above $1 million kicked in.
Anaheim, California, had the largest year-over-year increase in home sales at 37.7%. Salt Lake City, Utah, had the biggest decline at -54.7%.