December Housing Starts Stumble, but 2017 Posts 10-Year High

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that new housing starts in December fell to a seasonally adjusted annual rate of 1.192 million. That was a decrease of 8.2% from the upwardly revised November rate of 1.299 million and a decrease of 6.0% compared with the December 2016 rate of 1.268 million.

For the full year, 1.202 million housing units were started, up 2.4% compared with 2016, as well as a 10-year high.

The revision to the November rate added 2,000 new housing starts from the previously reported total. The consensus estimate from a survey of economists expected a rate of around 1.28 million.

Single-family housing starts fell month over month by 112,000 in December to 836,000. The decrease reflects a drop of 24.2% in the Northeast and 16.6% in the South.

The seasonally adjusted rate of new building permits ticked down to 1.302 million, 0.1% lower than the upwardly revised November rate of 1.303 million and up 2.8% from the December 2016 rate of 1.266 million. An estimated 1.263 million permits were issued in 2017, up 4.7% year over year.

Permits for new single-family homes rose in December from a revised annual rate of 865,000 in November to a seasonally adjusted annual rate of 881,000. The rate rose 2.8% year over year.

Multifamily starts, for buildings with five or more units, decreased by 21.6% year over year in December and rose by 2.6% compared with November. This number is more volatile than the single-family number and has moved mostly sideways since 2013.