WASHINGTON - An unseasonably warm December helped boost total housing starts, which includes condominiums and apartments, 4.5 percent to a seasonally adjusted annual rate of 1.642 million units for the month, according to figures released by the U.S. Department of Commerce. However, single-family builders broke ground on fewer homes in December as builders reduced their inventories while buying conditions improved.
Single-family housing starts decreased 4.1 percent to a seasonally adjusted annual rate of 1.230 million units in December. This was 24.7 percent below the pace of single-family starts a year earlier.
"The improvement in market conditions, coupled with the drop in single-family housing starts, indicates that builders are working to control their inventories and positioning themselves for the upcoming spring buying season," said David Pressly, president of the National Association of Home Builders (NAHB).
"With improving affordability measures, strengthening consumer assessments of home buying conditions, and an upswing in applications for mortgages to buy homes, builders are starting to see that the worst is behind them," said David Seiders, NAHB chief economist.
Regionally, housing starts increased in three of four regions in December. Construction of new homes and apartments rose 25.6 percent in the Northeast, 1.8 percent in the Midwest, and 12.4 percent in the West. Housing starts declined in the South by 2 percent over the month. Three of the four regions reported a pace of construction well below a year earlier. Only the Northeast reported a higher pace than a year ago.
Total housing starts for 2006 were at an estimated 1.801 million units, the Commerce Department reported. This was 12.9 percent less than the 2.068 million housing starts reported for 2005.
Builders increased the pace of permit issuance by 5.5 percent in December to 1.596 million units, a level that was 24.3 percent below the previous year. Single-family permit issuance was up 1.2 percent to a pace of 1.164 million units for the month. This was 29.1 percent below a year earlier. The pace of multifamily permit issuance was up 19 percent to 432,000 units for the month, but 7.1 percent below the December 2005 pace.
Jan. 22, 2007: Total Housing Starts Up, Single-Family Starts Down in December
January 22, 2007