U.S. housing permits hit 12-year high – Daily News

on Dec19
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Nationwide permits to build homes climbed to a 12-year high as the housing-market strengthened amid low mortgage rates, solid job growth, and optimistic buyers and builders.

Permits, a proxy for future construction, increased 1.4% to an annualized 1.48 million pace. Residential starts rose 3.2% to a three-month high 1.37 million annualized rate.

Key insights from the government report …

Big picture: The data indicate residential construction may add to fourth-quarter growth after contributing in the previous quarter for the first time since the end of 2017. Demand has been fueled by mortgage rates near a three-year low as the job market remains resilient and wage gains help put money into the pockets of potential homebuyers.

Single focus: Construction of one-family homes rose to the highest since January, while permits for those dwellings increased to the highest level since July 2007.

Housing upswing: Homebuilder sentiment soared to a 20-year high in December. The latest consumer sentiment gauge from the University of Michigan also showed an index measuring home-buying conditions rose to a five-month high in December.

Rentals: Groundbreakings for the multifamily category, which tends to be volatile and includes apartment buildings and condominiums, increased to a three-month high while permits also rose.

Beat expectations: The median forecast in a Bloomberg survey of economists called for starts to rise to a 1.35 million pace.

Regionally: Two of four regions posted a gain in starts, led by a jump in the South to the fastest pace since March 2007. Starts in the West also advanced.

Pipeline: About 188,000 homes were authorized but not yet started, the most since February, indicating a growing backlog for homebuilders.

Large caveat: The report, produced jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, has a wide margin of error.

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