New home construction workers. (Photo: Reuters)
The Commerce Department said Friday housing starts plummeted 18.7% to a seasonally adjusted annual rate of 1.090 million in November. That missed the median economic forecast for 1.230 million, while building permits, which are a sign of future activity, came in at 1.201 also missing the estimate for 1.240 million.
Housing starts in October were upwardly revised to a 1.34 million-unit rate, the highest since July 2007 and the widest gap between permits and starts for the year. A decline in starts was widely expected to bring them more in line with permits. Housing starts data, which is volatile month-to-month, showed declines in all four regions last month.
The housing market remains on shaky ground even as mortgage rates have jumped to more than two-year highs following the election of Donald Trump as the next president. A survey on Thursday showed homebuilders’ confidence in December hitting its highest level since July 2005, with builders anticipating strong sales.
Last month, single-family home building, which accounts for the largest share of the residential housing market, fell 4.1 percent to an 828,000-unit pace. Single-family starts rose to nine-year high in October.
The housing market is being supported by a tightening labor market, which is starting to drive up wages.
Housing starts for the volatile multi-family segment tumbled 45.1 percent to a 262,000-unit pace.
Permits for future construction fell 4.7 percent in November. Single-family permits rose 0.5 percent last month, while building permits for multi-family units dropped 13.0 percent.
