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First Cut: Housing starts second highest for 2019 to-date, permits issued highest since May 2007

Starts of new homes rose 3.2% in November to 1.365 million units (SAAR) to reach the second highest point in 2019 to-day. Other than the 1.375 million in August, this was a peak level since the 1.448 million in June 2007. Starts were up 13.6% compared to a year ago. Single-family starts were up 2.4% month-over-month and 16.7% from November 2018. Multi-units were up 4.9% to 427,000 in November and up 7.3% from the same month last year.

Starts were particularly active in regions where weather was less of an issue. The South gained 10.3% and the West was up 1.4%. Starts were off 3.7% in the Northeast and 15.5% in the Midwest as early winter storms covered a lot of territory.

Permits issued climbed 1.4% to 1.482 million units in November and were up 11.1% compared to November 2018. Single-family permits were up 0.8% in November to 918,000 and multi-units were up 2.5%. Compared to a year ago, single-family permits were up 8.9% and multi-units up 14.9%.

Permits were up in three of four regions. The biggest gains were in the Northeast at up 18.1% and Midwest at up 15.1%, and to a lesser extent in the West at up 1.3%. Permits were down 4.7% in the South, but still solid.

The driver of the upward movement was consumer demand for new housing as rising incomes combined with low mortgage rates are bringing buyers into the market. Limited stocks of existing homes in the sought-after sizes and prices ranges are bringing some consumers to the new home market. Sales of units not yet started have been strong and ensuring that starts will be more elevated. The demand also means permits are going to be applied for at a good clip.

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