Jan 17, 2013

Good News on the Housing Market


Housing Starts Surged in December

Housing starts jumped 12.1% to 954,000 in December, with gains in multi-family starts continuing to outpace gains in single-family starts. Gains were broad-based across all regions, with the largest gains in the South and West. This matches a pattern we have seen in home prices, as prices are now rising fastest in areas hit the hardest by the subprime crisis, where inventories have now evaporated.

Gains in the Northeast picked up slightly from the pace that we saw last month in the multi-family category.  It will take some time for reconstruction efforts in the wake of Superstorm Sandy to get in full swing, but it seems a good bet that the annual total of housing starts will cross the one million mark in 2013. That would be a full year in advance of when many hoped at this time last year.

Bottom Line: The housing market is healing faster in multi-family rentals than in the single-family market. This dampens, but does not change, its effect on the overall economy, which is unequivocally positive.