Home building slows in November
Homes under construction last year at Rancho Mission Viejo. Permits for new construction fell 5.7% in March compared to last month, the Commerce Department reported.
The home-building business is closing the year on a down note.
Housing starts and building permits both fell in November, the Commerce Department reported Tuesday. Analysts had expected modest gains.
The number of building permits issued dipped 5.2% from its six-year high recorded in October, while housing starts — which counts the actual beginning of construction — declined 1.6%. Both measures also fell below levels seen in November 2013.
The fall in housing starts was sharper for single-family homes, reflecting continued softness in the new-home industry as buyers struggle with higher prices and builders cater largely to the higher end of the market. Through November permits for single-family homes are up just 1% from last year’s figure, far below historical averages.
Weather may have been a factor, said Patrick Newport with IHS Global Insight, as it was the coldest November in 14 years. Weak wage growth is likely a bigger factor, as the figures indicate very little spec construction by homebuilders.
The data “implies that most of the time, ground is not broken until the builder has found a buyer for the property,” Newport wrote.
Construction of apartment buildings has been stronger, as builders try to attract a growing population of renters. Permits for buildings with five or more units is up 14.1% year-to-date, though the sometimes-volatile figure fell 11.1% in November.
Keep an eye on housing and real estate in Southern California. Follow me on Twitter at @bytimlogan
