WASHINGTON — The pace of housing starts posted an 8.2% decline to a 1.192 million seasonally adjusted annual rate in December, a surprise to analysts surveyed by MNI expecting a 1.275 million pace, data reported by the Commerce Department Thursday morning showed.
Housing starts fell 14.2% in the South region, reflecting a slowdown post-hurricanes. In addition to the decline in the South, all other regions saw declines. The Northeast saw a 4.3% decline, the Midwest a 2.2% drop, and the West a mild 0.9% fall.
Building permits fell 0.1% in the month to 1.302 million, above the 1.293 million expected. Homes permitted but not started rose 1.3%. Single-family permits authorized increased 1.8% to 881,000, the highest level seen since August 2007. This suggests starts could pick up in December. However, multi-family permits saw a 3.9% decline, which did offset the gain of single-family.
Housing starts of single-family homes fell by 11.8% in December after a 6.9% increase in the previous month. Starts of multi-family homes increased 1.4% after a 6.1% fall in November, based on an MNI calculation.
The pace of unadjusted starts stands at 2.4% above its year ago level, a sign that home building has increased. The NAHB index for January fell slightly to 72 from the 18-year high of 74, reported on Wednesday. The NAHB attributed to a continued positive outlook despite rising building material prices and labor shortages.
Despite the decline in December starts and the upward revisions to the previous months, the fourth quarter average for starts was 6.7% higher from the third quarter average, while permits were 5.2% higher, indicating still strong growth in the house building business.
