The numbers: U.S. home builders started construction on homes at a seasonally-adjusted annual rate of roughly 1.7 million in December, representing a 1% increase from the previous month, the U.S. Census Bureau reported Wednesday. Compared with December 2020, housing starts were up 2.5%.
Meanwhile, permitting for new homes occurred at a seasonally-adjusted annual rate of 1.87 million, up 9% from November and 6.5% from a year ago.
Economists polled by MarketWatch had expected housing starts to occur at a median pace of 1.65 million and building permits to come in at a median pace of 1.71 million.
Key details: The surge in permitting was driven by a 112% increase in the number of housing structures authorized in the Northeast. The Census Bureau explained the anomaly in a special notice with the housing-starts report: Philadelphia ushered in multiple changes to real-estate taxes for residential projects that are permitted after Dec. 31. Therefore, developers rushed to get permits approved ahead of that start date.
Still, the Northeast wasn’t the only region to see building permits increase. Permitting activity also rose nearly 22% in the Midwest on a monthly basis, though it fell in both the South and the West.
Most of the boost in permitting activity stemmed from a swathe of authorizations for multifamily buildings and projects with between two and four housing units. Before seasonal adjustments, the number of multifamily permits issued in December was the highest for any month since 1985. Single-family permits only increased 2% between November and December.
