Single and multi-family construction have seen similar gains from 2009, but a McGraw-Hill official forecasts further volatility in the sector. Although residential building levels have improved since the post-stimulus plunge, the roller-coaster trend doesn’t indicate sustained growth. See the following article from HousingWire for more on this.
Residential building grew modestly in November as the housing sector continued to recover from the drop-off of activity in late spring spurred by the expiration of the homebuyer tax credit.
Residential construction increased 3% from October to an annualized rate of $122.8 billion, according to a monthly report by McGraw-Hill Construction.
Single-family housing grew 4% during the month, “maintaining the very gradual upward movement that’s been present since August,” the report said. The November pace of single-family construction was still 13% below the average for the first quarter, when a more solid recovery seemed to be taking hold, according to the firm.
Multifamily housing slipped 4% in November after two consecutive months of improved activity, while McGraw-Hill’s index of new construction starts dropped to 80 from 88 in October. A 100 on the index corresponds to construction conditions witnessed in 2000.
Robert Murray, vice president of economic affairs at McGraw-Hill Construction, said he expects construction patterns to remain volatile.
“Since early 2009, the construction start statistics have shown an up-and-down pattern, essentially leveling off within a set range following an extended three-year decline,” Murray said. “The pullback in November after October’s slight gain shows that this up-and-down pattern continues, and there’s yet to be evidence that renewed expansion is taking hold.”
During the first 11 months of the year, residential building is up 7% compared to the same period a year ago. Single-family building is up 7%, varying by region. Single-family building is up 11% in the Northeast, up 10% in the South Atlantic, up 8% in the Midwest, up 7% in the West and up 2% in the South Central U.S.
Multifamily housing is up 8% for the first 11 months of the year compared to 2009.
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