Housing Starts Jump 8.9 percent in November

Home building rallied from a six-month low in November, according to a Dec. 16 release issued by the U.S. Department of Commerce. Starts for new housing construction increased in all regions of the country, and the issuance of permits rose to its highest level in a year.

Construction of new homes rose 8.9 percent to a seasonally adjusted annual rate of 574,000 units in November from 527,000 units in October.

According to the National Association of Home Builders (NAHB), the Northeast led housing production with a 16.4 percent increase in the construction of new homes, followed by a 12.3 percent gain in the South, a 3 percent increase in the Midwest and a 2 percent raise in the West.

In addition, the number of building permits issued nationally increased 6 percent in November to a seasonally adjusted annual rate of 584,000 units, which is its highest level in a year.

“The fact that both starts and permits for new housing production rose last month is a good sign that we’re headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the NAHB and a homebuilder from Tulsa, Okla., in a news release.

The NAHB says November’s high numbers represent a partial bounce-back from exceptionally low housing activity in October as well as an increase in the construction of multi-family housing units. Construction on multi-family housing jumped 67.3 percent from a record low in October to a seasonally adjusted annual rate of 92,000 units in November. Multi-family permits rose 8.8 percent to 111,000 units.

Chief Economist David Crow recently said that the increase in permits in November is a “hopeful indication” that the homebuyer tax credit may take its desired effect in early 2010, though credit is currently difficult to obtain.

The $8,000 first-time homebuyer credit was set to expire Dec. 1, which may have contributed to the low numbers for October. But an act passed on Nov. 6 extended the program until June 30, 2010. It also expanded the eligibility for the tax credit to a larger group of homebuyers.