Following several strong months, U.S. housing starts fell by 3% in November to 861,000 units, according to numbers released Wednesday by the Commerce Department. That number came in slightly below analyst expectations, which called for an annualized pace of 872,000 units.
Leading the decline were single-unit starts, which fell by 24,000. Multi-unit starts also fell, although only by 3,000. Geographically speaking, the West saw the largest drop in starts, with a 19.2% decrease, followed by the Northeast, with a 5.2% drop. The Northeast was also the only region to show a year-on-year decrease, although its 25.5% decline may be partially attributed to the effects of Hurricane Sandy.
Despite the monthly dip, the housing market appears to be on an uptrend, as permits rose by 3.6% to 899,000 this month. “The level of starts fell for the first time in three months,” Miller Tabak & Co. Chief Economic Strategist Andrew Wilkinson says, “yet there is little question about the momentum that has characterized the homebuilding market for more than two years.”
In another indication of a housing recovery, U.S. homebuilder confidence rose to its highest level in more than six years in December, according to a report from the National Association of Home Builders/Wells Fargo. Recent housing reports have also been good for lumber futures, which are also at a six-year high.