US building permits hit a 13-year high in January as the property market recovery continues in America, boosted by demand from overseas property investors.
Overall US building permits increased 9.2 per cent to a 1.55 million unit annualised rate in January. This is the highest level since March 2007. Single-family permits increased 6.4 per cent to a 987,000 rate while multifamily US building permits increased 14.6 per cent to a 564,000 pace.
Looking at regional permit data, US building permits are 34.6 per cent higher in the North East, 8.2 per cent higher in the Midwest, 8.0 per cent higher in the South and 3.1 per cent higher in the West.
According to the US Housing and Urban Development and Commerce Department, total housing starts decreased 3.6 per cent in January 2020 from an upwardly revised December 2019 reading to a seasonally adjusted annual rate of 1.57 million units. Meanwhile, overall US building permits surged to a 13-year high.
The January 2020 reading of 1.57 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 5.9 per cent to a 1.01 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 0.7 per cent to a 557,000 pace.
Regionally in January, combined single- and multifamily housing production increased 31.9 per cent in the North East and 1.2 percent in the West. Starts fell 25.9 per cent in the Midwest and 5.4 per cent in the South.
Dean Mon, chairman of the National Association of Home Builders, said: ‘The housing recovery continues, as single-family housing starts have surpassed 1 million for the second consecutive month and multifamily production has been running above 500,000 for the same period. Meanwhile, builder confidence remains solid as demand continues to pick up.’
Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President of Forecasting and Analysis, added: The growth in US building permits is a harbinger that the market will continue to move forward in the coming months even as builders grapple with supply-side issues like excessive regulations, labour shortages and rising material costs.’