The latest data from the U.S. Census Bureau and the Department of Housing and Urban Development reveals encouraging trends in the housing market for December 2023. Privately-owned housing units authorized by building permits increased to a seasonally adjusted annual rate of 1.5 million. This figure represents a 1.9% increase from the revised November rate of 1.467 million and a significant 6.1% increase from December 2022, which stood at 1.41 million.
Single-family authorizations in December reached a rate of 994,000, marking a 1.7% increase from the revised November figure of 977,000. Additionally, authorizations of units in buildings with five units or more reached a rate of 449,000 in December.
However, the year-end statistics for 2023 show a different trend. An estimated 1.47 million housing units were authorized by building permits, representing an 11.7% decrease compared to the figure of 1.66 million in 2022.
Privately-owned housing starts in December reached a seasonally adjusted annual rate of 1.46 million. While this figure is 4.3% below the revised November estimate of 1.52 million, it remains 7.6% above the rate observed in December 2022, which stood at 1.35 million. Single-family housing starts in December were at a rate of 1.02 million, reflecting an 8.6% decrease from the revised November figure of 1.12 million. Units in buildings with five units or more saw a December rate of 417,000.
Despite the monthly dip in housing starts, the annual statistics for 2023 reveal a more resilient picture. An estimated 1.41 million housing units were started in 2023, showing a decrease of 9% compared to the 2022 figure of 1.55 million.
"Among the homebuilder sentiment index’s components, sales expectations in the next six months surged by 12 points into positive territory, marking the highest level since July 2023," First American Deputy Chief Economist Odeta Kushi said. "Lower mortgage rates are enticing buyers off the sidelines and fueling builder optimism. Additionally, a limited supply of existing homes is prompting a shift towards new home purchases."
Privately-owned housing completions in December reached a seasonally adjusted annual rate of 1.57 million. This marked an 8.7% increase from the revised November estimate of 1.45 million and a 13.2% increase from the December 2022 rate of 1.4 million. Single-family housing completions in December reached a rate of 1.05 million, indicating an 8.4% increase from the revised November rate of 974,000. Meanwhile, units in buildings with five units or more achieved a December rate of 509,000.
In the annual context, 1.45 million housing units were completed in 2023, representing a 4.5% increase compared to the 2022 figure of 1.39 million.
