Housing Markets Keep Rolling Into 2020

January 17, 2020 | Hoya Capital

Housing Markets Keep Rolling Into 2020 Uncategorized Jan 17 Written By The US housing market picked up in 2020 where it left off in 2019 with signs of continued reacceleration, highlighted by Housing Starts data on Friday which surged to 13-year highs. The strong end of 2019 for home construction comes after one of the worst eight-to-twelve month periods for home construction since the financial crisis. For the US housing industry, the story of the last twelve months continues to center around the resilient demographic-led growth in household formations along with the sharp pullback of the 30-year fixed mortgage rate, which has stimulated renewed activity across nearly all segments of the housing industry.

The US Census Bureau reported that housing starts rose to a 1.61 million-unit rate in December, coming in far above estimates of 1.38 million. Helped by unseasonably warm weather in December, the monthly rate of Housing Starts jumped 40% year-over-year and ended 2019 with full-year growth of 3.2%, a rather remarkable feat given the dismal data earlier in the year. The gains were broad-based with single-family rising for the seventh consecutive month and multifamily showing continued signs of reacceleration as well.

The rate of single-family starts jumped 29.6% year-over-year in December and ended 2019 with full-year gains of 1.4%. The rate of multifamily starts, meanwhile, jumped 74.6% in December and ended the year with full-year gains of 7.8%. This report is consistent with yesterday's homebuilder sentiment data. Homebuilders are just about as confident as ever, according to data released on Monday morning from the National Association of Homebuilders (NAHB). With a reading of 75, the Housing Market Index remained near the highest level in 20 years, down one point from last month's high of 76. (Readings above 50 are positive) Among the three subcomponents, Current Sales declined two points to 84, Futures Sales remained steady at 79, and Buyer Traffic hit all-time record highs at 58, up ...