US Homebuilding Dips, but Year Best Since ’07
U.S. home construction slowed in December but ended 2013 with the best showing since the housing bubble burst.
The Commerce Department said Friday that builders broke ground last month at a seasonally annual rate of 999,000. That’s 9.8 percent lower than November’s pace of 1.12 million, which was the fastest in five years.
For the year, builders started 923,000 homes and apartments, up 18.3 percent from 2012. It was the fourth straight annual gain and the strongest since 2007, when 1.36 million homes were started.
The housing market has been recovering steadily over the past year, helping to boost economic growth and create jobs. But a rise in mortgage rates from record lows reached a year ago have started to weigh on those gains.
Still, economists said they December’s dip in activity followed a huge gain November. They also blamed some of the decline last month on cold weather, which may have disrupted some construction activity.
"Despite really bad weather, builders still managed to keep digging and that is a great indication that the housing market continues to move forward," said Joel Naroff, chief economist at Naroff Economic Advisors.
For December, construction of single-family homes, which makes up roughly two-thirds of homebuilding, fell 7 percent to an annual rate of 667,000. Construction of apartments, which can be more volatile, dropped 14.9 percent to a 332,000 rate.