Starts jumped by 28.1% in 2012 from the prior year, the biggest annual gain since 1983.
Nonetheless, the market remains short of the 2.07 million started at the peak of the housing boom in 2005, which was three-decade high. The number of starts averaged 1.74 million a year from 2000 through 2004.
Construction of single-family houses climbed 8.1% in December from the prior month to a 616,000 annual rate, also the highest since June 2008. Work on multifamily homes, such as apartment buildings, climbed 20.3% to an annual rate of 338,000.
All four regions showed a gain in starts last month, led by a 24.7% surge in the Midwest.
Confidence among homebuilders held in January at the highest level since April 2006, the National Association of Home Builders/Wells Fargo reported yesterday. The group’s gauge of buyer traffic also climbed to a more than six-year high.
Lennar, the largest U.S. homebuilder by market value, is leveraging rental demand by pledging to construct $1 billion of multifamily properties in an attempt to diversify its offerings.
The Miami-based company plans to start building 3,000 apartments at a development cost of $560 million this year, Chief Executive Officer Stuart Miller said earlier this week on a conference call. The first projects are a $36 million, 316- unit community in Jacksonville, Florida, in partnership with Carlyle Group LP, and a $32 million, 264-unit community northeast of Atlanta.
“As demand for new sale housing continues to increase from historically low levels, rental demand has continued to grow, fueled by expanding household formations, credit and down payment-challenged homebuyers and steadily improving employment,” Miller said on the call.