December proved to be a fruitful month for U.S. housing starts, which reached their highest level since 2007.
The new data came the same day the Federal Reserve reported manufacturing production had ticked up slightly in December.
Housing starts rise 16.9%
According to data released by the U.S. Census Bureau and the Department of Housing and Urban Development, privately owned housing starts in December reached a seasonally adjusted annual rate of 1,608,000, up 16.9% from the previous month. December starts were up by an even larger percentage on a year-over-year basis (40.8%).
Broken down further, single-family housing starts reached a seasonally adjusted annual rate of 1,055,000 in December, up 11.2% from the previous month.
Meanwhile, the rate for units in buildings with five units or more reached 536,000.
Overall, housing starts in 2019 reached their highest level since 2007, according to Census Bureau historical data.
Housing starts plummeted after the 2008 financial crisis, down from 1,355,000 in 2007 to 905,500 in 2008 and 554,000 in 2009.
After 2009, housing start activity gradually returned, crossing the 1 million start threshold in 2014.
Low mortgage rates have in part contributed to the rise. According to Freddie Mac, 30-year fixed-rate mortgages averaged 3.74% in 2019, the lowest annual average rate since the company began issuing its weekly survey on mortgage rates.
Building permits down 3.9%
Housing units authorized by permits reached a rate of 1,416,000 in December, down 3.9% from the previous month but up 5.8% on a year-over-year basis.
Permits for single-family homes reached a rate of 916,000, down 0.5% from the previous month, while permits for units in buildings with five units or more hit a rate of 458,000.
Overall, permits increased in 2019 compared with the previous year. In 2019, approximately 1,289,800 units were authorized by building permits, marking a 3.2% increase from the previous month.
Housing completions rise
Housing completions were also up in December, hitting a seasonally adjusted annual rate of 1,277,000, which marked a 5.1% increase from the previous month and a 19.6% increase from December 2018.
Single‐family housing completions in December hit a rate of 912,000, up 0.7% from November. For units in buildings with five units or more, the rate reached 357,000.
An estimated 1,250,600 housing units were completed in 2019, which marked a 5.6% increase from 2018.