Housing Starts Flat in November but Permits Unexpectedly Collapse by 11 Percent

The Commerce Department’s New Residential Construction Report shows housing starts were flat but single-family starts and permits were down hard in November.

Building Permits 

• Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,342,000. This is 11.2 percent below the revised October rate of 1,512,000 and is 22.4 percent below the November 2021 rate of 1,729,000. 
• Single‐family authorizations in November were at a rate of 781,000; this is 7.1 percent below the revised October figure of 841,000. 
• Authorizations of units in buildings with five units or more were at a rate of 509,000 in November. 

Housing Starts 

• Privately‐owned housing starts in November were at a seasonally adjusted annual rate of 1,427,000. This is 0.5 percent (±12.3 percent)* below the revised October estimate of 1,434,000 and is 16.4 percent (±13.4 percent) below the November 2021 rate of 1,706,000. 
• Single‐family housing starts in November were at a rate of 828,000; this is 4.1 percent (±11.3 percent)* below the revised October figure of 863,000. 
• The November rate for units in buildings with five units or more was 584,000. 

Housing Completions 

• Privately‐owned housing completions in November were at a seasonally adjusted annual rate of 1,490,000. This is 10.8 percent (±15.8 percent)* above the revised October estimate of 1,345,000 and is 6.0 percent (±17.6 percent)* above the November 2021 rate of 1,406,000. 
• Single‐family housing completions in November were at a rate of 1,047,000; this is 9.5 percent (±12.9 percent)* above the revised October rate of 956,000. 
• The November rate for units in buildings with five units or more was 430,000.  

Housing Starts Single Family vs Multi-Family 

Note the stunning 29 percent collapse in single family housing starts from a year ago. 

Housing Starts, Permits, Completions Not Seasonally Adjusted 

Unadjusted Numbers Year-Over-Year

• Starts: Down 16.4 percent
• Permits: Down 22.4 percent
• Completions: Up 9.5 percent

Those numbers remove supply constraints in both materials and labor. 

Lumber Futures 

Lumber futures have crashed to pre-pandemic levels. And coupled with the collapse in starts and permits, the price of labor rates to drop as well. 

Importantly, subcontractors will be fighting for work rather than builders fighting for subcontractors. 

Completed units will eventually start pressuring rent prices. 

Inflation Has Likely Peaked

Add it up and I am reasonably confident we have seen peak inflation although one should never discount the madness of politicians. 

Our energy policy is an inflationary disaster. 

EU Imposes the World’s Largest Carbon Tax Scheme, Inflationary Madness Sets In

For discussion of the energy picture, please see EU Imposes the World’s Largest Carbon Tax Scheme, Inflationary Madness Sets In

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