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Report from
North America
2024 housing starts fell despite December jump
Housing starts in the US increased 16% in December to a
seasonally adjusted annual rate of 1.50 million units
according to the US Department of Housing and Urban
Development and the US Census Bureau. This is the
highest rate since February 2024.
The December reading of 1.50 million starts is the number
of housing units builders would begin if development kept
this pace for the next 12 months. Within this overall
number, single-family starts increased 3.3% to a 1.05
million seasonally adjusted annual rate. The multifamily
sector, which includes apartment buildings and
condominiums, increased 62%.
Total housing starts for 2024 were 1.36 million, a 3.9%
decline from the 1.42 million total for 2023. Single-family
starts in 2024 totaled 1.01 million, up 6.5% from the
previous year. Multifamily starts ended the year down
25% from 2023.
“Single-family home building increased 6.5% for 2024, as
builders added more supply in a market continuing to face
a housing affordability crisis due to elevated mortgage
interest rates and higher construction costs,” said Carl
Harris, chairman of the National Association of Home
Builders (NAHB) and a custom home builder in Kansas.
“Nonetheless, the industry expects to see a slight gain for
single-family home building in 2025 because of a
persistent housing shortage and ongoing solid economic
conditions.”
Combined single-family and multifamily starts for 2024
were 9.1% higher in the Northeast region, 0.1% lower in
the Midwest, 5.2% lower in the South, and 7.7% lower in
the West. Housing starts across Canada came in at a
seasonally adjusted annualised rate of 231,468 units in
December, a 13% drop from the month before reported the
Canada Mortgage and Housing Corporation (CMHC).
In 2024 starts across the country ticked up about 2% to
245,120. The advance for the year marked the third-
highest level on record, making some progress to narrow
the shortage of homes in Canada and restore affordability
in urban centres, according to CMHC's Chief Economist.
See: https://www.census.gov/construction/nrc/current/index.html
and
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/housing-starts-end-2024-note
US existing home sales gained momentum in
November
US existing home sales rose more than expected in
November and logged the biggest year on year increase
since June 2021 according to data from the National
Association of Realtors. Existing home sales grewalmost
5% month on month to a seasonally adjusted annual rate
of 4.15 million units in November. On an annual basis
sales jumped 6%.
Home sales momentum is building according to NAR
Chief Economist, Lawrence Yun, as more buyers have
entered the market as the economy continues to add jobs
and consumers get used to a new normal of mortgage rates
between 6% and 7%.
Single-family existing home sales rose 5% to a seasonally
adjusted annual rate of 3.76 million in November, up 7%
from the previous year.
Existing-home sales in the Northeast in November jumped
8.5% from October to an annual rate of 510,000, up 6.3%
from November 2023. In the Midwest, existing-home sales
grew 5.3% in November to an annual rate of 1 million, up
5.3% from the previous year. Existing-home sales in the
South rose 5.6% from October to an annual rate of 1.87
million in November, up 3.3% from one year before. In
the West, existing-home sales were unchanged in
November at an annual rate of 770,000, up 14.9% from a
year ago.
See: https://www.nar.realtor/research-and-statistics/housing-
statistics/existing-home-sales
Home builders confident heading into 2025
After a month of no movement, homebuilder confidence is
back on its upward trajectory. The National Association of
Home Builders (NAHB)/Wells Fargo Housing Market
Index (HMI) rose one point in January to a reading of 47.
The trade group attributes the jump to builders having a
more optimistic attitude as they anticipate improved
economic growth and an easing of regulatory conditions in
the coming year. But they are also concerned about the
potential impact of building material tariffs and how a
larger government deficit could put upward pressure on
inflation and mortgage rates.
See: https://www.nahb.org/News-and-Economics/Housing-
Economics/Indices/Housing-Market-
Index#:~:text=The%20HMI%20is%20based%20on%20a%20mo
nthly%20survey,on%20a%20scale%20ranging%20between%20
0%20and%20100.
Labour market grew faster than expected in December
Job growth was stronger than economists anticipated last
month, according to the Labour Department’s monthly
nonfarm payrolls report. The US added an estimated
256,000 jobs in December, smashing consensus economist
estimates of a seasonally adjusted 153,000. The
government also said it revised its prior estimates for
October job growth upward by 7,000 and for November
job growth downward by 15,000.
For the month, little or no change in employment was
found in construction and manufacturing.
The year 2024 was a solid year for job growth, non-farm
payrolls grew by more than 1% from 157.3 million to
more than 159 million from December 2023 to December
2024. However, last year US companies announced the
second highest job cuts since 2009, trailing only 2020,
according to Challenger, Gray & Christmas.
See: https://www.bls.gov/news.release/empsit.nr0.htm
Consumer inflation expectations soared in January on
tariff fears
US consumers expect inflation to increase over the next 12
months and beyond reflecting concerns that broad tariffs
on imports pledged by President Donald Trump's
incoming administration could raise prices for households.
The University of Michigan's survey showed consumers'
one-year inflation expectations jumped to 3.3% in January,
the highest level since May, from 2.8% in December. That
raised the 12-month inflation expectations above the
2.3%-3.0% range seen in the two years prior to the
COVID-19 pandemic.
In addition to imposing or massively raising tariffs on
imports, Trump has also promised to deport millions of
undocumented immigrants, policies that economists have
warned would stoke inflation.
The University of Michigan's preliminary reading on the
overall index of consumer sentiment came in at 73.2 this
month, compared to a final reading of 74.0 in December.
See: http://www.sca.isr.umich.edu/
Manufacturing improving but still facing challenges
US manufacturing moved closer to recovery in December
with production rebounding and new orders rising further
but the outlook remains uncertain amid the threat of higher
tariffs that could raise prices of imported raw materials.
Despite the increase in the Institute for Supply
Management's (ISM) Purchasing Managers Index (PMI) to
a nine-month high last month, the tone of the survey was
less upbeat, with phrases such as "volume decreases" and
"significant slowdown" appearing in some of the
comments from respondents. None of the six largest
manufacturing industries grew last month.
The ISM said on Friday that its manufacturing PMI
increased to 49.3 last month, the highest reading since
March, from 48.4 in November. A PMI reading below 50
indicates contraction in the manufacturing sector which
accounts for 10.3% of the economy. December marked the
ninth consecutive month that the PMI remained below the
50 level. Seven industries reported growth last month
including the wood products industry and the furniture and
elated products industry.
See: https://www.ismworld.org/supply-management-news-and-
reports/reports/ism-report-on-business/pmi/december/
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