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South Drives Dip in Housing Permits

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Mortgage Daily

                                                 January 18, 2018

A drop in building permits during the final month of last year was driven by the South, while the West was behind an increase in completed construction.

In places where permits are issued, 1,263,400 new privately owned housing units were authorized last year, up from an upwardly revised 1,206,600 authorized units during 2016.

The 2017 total included 817,700 one-unit properties, 35,400 two-to-four-unit property units and 410,300 multifamily housing units.

Those metrics were among several jointly reported Thursday by the Census Bureau and the Department of Housing and Urban Development.

On a seasonally adjusted basis, the annual rate of permits
during just December was 1.302 million, dipping from an upwardly revised 1.303 million a month earlier but strengthening from an upwardly revised 1.266 million a year earlier. Last month’s annual rate was 881,000 on one-unit homes and 382,000 on multifamily units.

In the South, the seasonally adjusted annual rate was 579,000, sinking from November by 11 percent — the only decline of any region.

In the West, the rate rose 2 percent to 361,000, while it
increased 9 percent in the Midwest to 199,000, and soared 43 percent in the Northeast to 163,000.

There were a seasonally adjusted 154,000 U.S. housing units authorized in December 2017 but not yet started.

Home builders broke ground at a seasonally adjusted annual rate of 1.192 million units during the final month of 2017, falling 8 percent from the preceding month and down 6 percent from the same month in 2016. The month-over-month decline in construction started was driven by one-unit properties, which tumbled 12 percent. The multifamily rate was up 3 percent.

A statement from the National Association of Home Builders indicated that while single-family starts fell, the three-month moving average reached a post-recession high.

“A return to normal levels of housing production this month is expected after a very strong fall season,” NAHB Chief Economist Robert Dietz said in the statement. “We saw a surge of housing activity in the South after hurricane-related delays, and now that region is returning to its positive growth trend.”

Last year concluded with a seasonally adjusted 1.113 million housing units under construction.

Construction was completed on 1,152,300 housing units during all of 2017, climbing from an downwardly revised 1,059,700 the previous year. One-unit properties completed totaled 794,000, while the sum was 347,700 for multifamily units.

Housing units were completed at a seasonally adjusted annual rate of 1.177 million in December 2017, rising from an upwardly revised 1.152 million the prior month and a downwardly revised 1.096 million a year prior.

Last month’s seasonally adjusted annual rate for one-unit properties rose 4 percent to 818,000, while
completed multifamily construction slipped 2 percent to 346,000.

The seasonally adjusted rate of completed construction in the
West was 298,000 in December, soaring from one month earlier by 30 percent — the only increase for any region.

A less than 1 percent decrease in the South left the rate there at 601,000. Completions fell 6 percent in the Midwest to a 166,000 rate, and the Northeast sank 23 percent to a 112,000 rate.

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