Housing Starts Tank in December Even as They Rise for the Year

By February 2, 2014Economics

Southern Cal HousingHousing starts dropped sharply in December as builders lost a little confidence in the housing recovery, even as the housing market finished with its best yearly total since the housing boom, according to Commerce Department statistics.

Housing starts fell 9.8 percent in December to an adjusted annual pace of 999,000. But that was still better than the annual pace for the entire year, 923,400. Starts peaked in November, reaching 1.1 million.

Housing starts rose 18 percent for the year. But they are still well below levels for 2007, when nearly 1.4 million homes were started.

In addition, builders took out 4.8 percent fewer permits to construct single-family homes in December. This happened as builders lost some confidence in the market. A survey of builder sentiment compiled by the National Association of Home Builders showed builder confidence dipping to 56 in January. Even so, a reading above 50 indicates that more builders view conditions as good than poor.

About Boyce Thompson

Boyce Thompson, the author of The New New Home, is a writer and editor who has spent more than 30 years covering the housing market. Thompson began his career as a writer for publications such as The Washington Post, Governing, Practical Homeowner, Venture, and Changing Times, the precursor to the Kiplinger Letter.