The Census Bureau will soon be addressing growth in construction in its latest Construction Spending Report. Earlier this month, the Census Bureau reported that single-family housing starts rose 2% in October to 936,000, and housing completions were 10.3% higher from September’s 1.13 million.
“Construction activity reflected elevated home builder sentiment, which reached a 20-month high in October,” said realtor.com’s Senior Economist, George Ratiu.
Building permits rose in October to 1.46 million, which is 5% higher than the September rate of 1.39 million and a 14% increase from the October 2018 rate of 1.28 million.
First American Financial Corporation Chief Economist Mark Fleming noted low mortgage rates, rising household income, and a surge of millennials had boosted the demand for housing. Fleming, though, said inventory would continue to be an issue.
“However, we have underbuilt new housing relative to demand for years. Building will have to exceed household formation for a number of years to reduce the housing stock ‘debt’ we have accumulated,” Fleming said.
Fleming said First AM expects strong housing demand to continue and construction to accelerate in 2020, which “may help alleviate some competition in the market.”
The Northeast was the only region in the nation that recorded a month-to-month decline in housing starts, falling 21.9%. The Midwest region grew by 8.7%, the South rose by 0.7%, and the West rose by 17.6%.
Here's what else is happening in The Week Ahead
Black Knight Mortgage Monitor (December 2)
Banking, Housing, and Urban Affairs Hearing (December 5)
Consumer sentiment index (December 6)
BLS Employment Data (December 6)