Housing market momentum remained solid heading into 2021. Total housing starts increased 5.8% in December to an annual pace of 1,669,000 (the strongest rate since 2006). Single family starts jumped 12.0% to an annualized rate of 1,338,000, while multi-family starts declined 13.6% to an annualized rate of 331,000. On a year-over-year basis, total housing starts were up 5.2% in December, driven by growth in single-family starts. Meanwhile, permits were up 4.5% on a month-over-month basis in December, to an annualized rate of 1,709,000 (also the strongest rate since 2006). Meanwhile, existing home sales were stronger than expected in December, up 0.7% month-over-month to a robust annual rate of 6.76 million. On a year-over-year basis, existing home sales were up more than 22% in December. Very low mortgage rates, solid stock market performance, and a meaningful shift toward working from home have provided strong tailwinds for the housing sector. The National Association of Home Builders’ housing market index eased to 83 this month from 86 in December, suggesting that activity in the housing sector may be easing a bit after a very strong fourth quarter.

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