U.S. Housing Starts Drop 9.8% In December After Sharp Jump In November

(RTTNews) - After reporting a substantial increase in new residential construction in the previous month, the Commerce Department released a report on Friday showing a pullback in U.S. housing starts in the month of December.

The report said housing starts fell 9.8 percent to an annual rate of 999,000 in December after jumping 23.1 percent to the revised November estimate of 1.107 million.

Economists had expected housing starts to drop to an annual rate of 985,000 from the 1.091 million originally reported for the previous month, reflecting a 9.7 percent decrease.

The upwardly revised November estimate represents the highest level of housing starts since a rate of 1.197 million in November of 2007.

The Commerce Department said single-family housing starts dropped 7.0 percent to a rate of 667,000, while multi-family starts slid 14.9 percent to a rate of 332,000.

Housing starts in the Midwest showed a significant pullback, tumbling by 33.5 percent. Starts in the South also fell by 12.3 percent, while the Northeast saw no change and starts in the West rose 15.0 percent.

The report also showed that building permits fell 3.0 percent to an annual rate of 986,000 in December from the revised November rate of 1.017 million.

Building permits, an indicator of future housing demand, had been expected to show a more modest decrease to a rate of 1.015 million.

Single-family permits dropped 4.8 percent to an annual rate of 610,000, while multi-family permits were unchanged at a rate of 376,000.

The Commerce Department noted that housing starts were up by 1.6 percent compared to the same month a year ago, while building permits were up 4.6 percent year-over-year.

On Thursday, the National Association of Home Builders released a report showing a modest pullback in homebuilder confidence in January following a significant improvement in December.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 56 in January from a downwardly revised 57 in December.

Economists had expected the index to come in unchanged compared to the 58 originally reported for the previous month.