Housing Starts Pace Up in November, But Off for the Year

November 2000 total housing starts were at a seasonally adjusted annualized level of 1.562 million units, a surprisingly solid 2.2% increase from the October total. However, the November starts pace during 2000 was 6.1% lower than during November of 1999.

Single-family homes were started at a 1.220-million-unit annualized rate during November 2000, off a slight 0.4% from the October pace but still within the very tight range of 1.201 to 1.229 million recorded in every month since June 2000. However, single-family starts last November were 9.2% below the rate of a year earlier.

Starts in multifamily buildings were markedly improved over the month, rising to an annualized rate of 342,000 units during November. This was up 12.9% from October's pace. November 2000's multifamily starts annualized total was a solid 7.2% higher than the 319,000-unit annual rate recorded during the same month of 1999.

Total starts through the first 11 months of 2000 were estimated at 1,491,300 units a modest 3.8% drop from the total for January—November 1999. Through November 2000, single- family starts had faded to a level 5.2% below the total for the first 11 months of 1999, but the number of units started in multifamily buildings was up a slight 1.7% from the total recorded during January—November of 1999.

Through the first 11 months of 2000, all four regions of the country had recorded slightly fewer housing starts than through the same period of 1999. The Midwest region recorded 5.8% fewer housing units started through November of 2000 compared to the same period of 1999. January—November starts in the South were off 4.0%, and in both the Northeast and the West 2.4% fewer new homes were started through the first 11 months of 2000 than during January—November 1999.

The building permit trend (-4.8%) was a bit weaker than the starts trend (-3.8%) through the first 11 months of 2000, and overall single-family home sales (new and existing combined) was running about 4% behind the 1999 pace.

Starts for the nation as a whole improved during November 2000 because of an exceptional gain in the West. Although starts declined in the South, Midwest, and Northeast regions of the country, homebuilding activity was up 28.1% between October and November in the Rocky Mountain and Pacific Coast states.

Building permits rose solidly during September, October, and November of last year, so its clear that lower mortgage interest rates are making the housing slowdown far milder than many had expected.