Higher confidence leads to increase in home building

Nationwide housing production rose nearly 23 percent in November to a seasonally adjusted annual rate of 1.09 million, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Builders are increasingly confident that buyers who have sat on the sidelines are feeling more secure about their economic situation and are now moving to purchase new homes,” says Rick Judson, chairman of the National Association of Home Builders (NAHB), in a press release. “This upward trend could be even stronger if not for persistently tight lending conditions for buyers and builders facing rising costs for building materials, lots and labor.”

According to David Crowe, NAHB chief economist, single-family and multifamily starts are at five-year highs.

“We hit a soft spot this fall when interest rates jumped and the government closed down, but mortgage rates still remain very affordable and pent-up demand is helping to boost the housing market,” he says. “We expect a continued steady, gradual growth in starts and home sales in 2014.”

Single-family starts posted a 20.8 percent gain to a seasonally adjusted annual rate of 727,000 units in November, marking their fastest rate since December 2007, according to NAHB. Multifamily production was up 26 percent to 364,000 units. Regionally, combined starts activity rose 41.7 percent in the Midwest, 38.5 percent in the South and 8.8 percent in the West. Starts fell 29.4 percent in the Northeast, though.