New projects involving multiple housing units helped sustained business at the end of 2011 as foreclosures turn more Americans into renters. Work on multifamily homes, such as apartments, townhouses and condominiums, fell 20.4 percent to 187,000 in December. For the year, multifamily starts totaled 178,300.
Single-Family Homes
Construction on single-unit dwellings increased 4.4 percent to a 470,000 rate in December from the prior month, the highest since April 2010. At the same time, demand for single-family homes has waned after three years with near 9 percent joblessness and a pipeline of distressed properties.
Homebuilders have signaled the new year will bring greater prospects than 2011. At Lennar Corp., the third-largest U.S. builder by revenue, new orders jumped 20 percent in the three months ended Nov. 30. Demand rose to 3,027 homes for the company's fourth quarter from 2,520 a year earlier.
"As I look ahead to 2012, I'm cautiously optimistic that we're seeing a real bottom form and that we will begin to see signs of recovery," Stuart Miller, chief executive officer the at Miami-based builder, said on a Jan. 11 conference call.
Builder Confidence
Confidence among U.S. homebuilders rose in January to the highest level in more than four years as sales and buyer traffic improved, according to the National Association of Home Builders. The Washington-based group's index of sentiment rose to 25 this month, reaching the highest level since June 2007. Nonetheless, readings lower than 50 mean more respondents still said conditions were poor.
Strong business for homebuilders would help propel U.S. growth, Federal Reserve policy makers have recently said. A Jan. 5 report from central bank Chairman Ben S. Bernanke called the weakness in the housing market a "significant barrier" to U.S. economic health. The next day Federal Reserve Bank of New York President William Dudley outlined strategies that could prevent foreclosures, ease refinancing of mortgages and get renters into lender-owned properties.