Housing Data: Strong Finish to 2019

By at 17 January, 2020, 1:44 pm

by Raymond J. Keating-

The U.S. Census Bureau’s report on new residential housing construction for December 2019 showed a solid year for housing. In particular, these measures of housing construction – starts and permits – showed strong growth starting mid-2019.

Housing starts for December 2019 (seasonally adjusted annual rate) grew dramatically, up by 16.9 percent versus November, and they were up by 40.8 percent compared to December 2018. As noted below, housing starts particularly began accelerating in August 2019.

Source: Federal Reserve Bank of St. Louis, FRED

As for housing permits (a gauge of future construction), while declining in December by 3.9 percent compared to the previous month, versus a year earlier, permits were up by 5.8 percent. Over the past year, as noted below, housing permits stepped up their growth in July.

Source: Federal Reserve Bank of St. Louis, FRED

In terms of the average annual data, in 2019, housing starts grew by 3.2 percent compared to 2018, and permits increased by 3.9 percent.

The accelerated growth in residential construction is good news for the small businesses that dominate housing construction – with 97.4 percent of employer firms in the residential building construction industry having fewer than 20 employees – and for private investment GDP data, given the decline in nonresidential investment in recent quarters. Housing has been a clear plus for the economy during the second half of 2019, and small businesses within the sector and those that service this ecosystem are benefitting accordingly.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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